New Fortress secures LNG Ship for Jamaica project
New Fortress Energy, the company seeking to supply liquefied natural gas (LNG) to Jamaica, has secured a two-year contract for an LNG vessel and is to start shipping gas this month.
Golar LNG Limited, a Bermuda-registered company which operates the vessel Golar Artic, revealed the contract details to its investors.
"Golar has now concluded a two-year charter agreement with New Fortress Energy Transport Partners LLC (NFE) for the employment of Golar Arctic in Jamaica," said Golar its statements obtained by the Financial Gleaner.
New Fortress has an agreement with Jamaica Public Service Company (JPS) to supply gas to its 120MW power plant at Bogue in Montego Bay, a contract New Fortress will service via gas infrastructure under development at the Montego Bay port. JPS has been mum on the price at which the gas will be supplied to Bogue.
The American company is also expected to develop gas infrastructure and supply JPS' Old Harbour plant with LNG once it is built, but those negotiations continue.
Bogue is currently being converted to run on gas as well as diesel oil, the fuel on which it was originally commissioned in 2003. General Electric is doing the retrofitting under a US$22.74-million contract from JPS. Bogue will become a combined-cycle plant, capable of switching between gas and diesel.
New Fortress Energy assumes the costs for delivering gas to the burner tip. JPS has no stake in the gas infrastructure project.
New Fortress' ambition
Golar said the deal it has with New Fortress solves a long-standing problem regarding the cost of regasification, and that it fits with New Fortress' ambition to become a regional supplier of LNG to Caribbean countries.
"Jamaica has long sought to replace liquid fuels with LNG, however, the size of the market has always made it difficult to justify the cost of a conventional floating storage and regasification unit," said the fuel shipping company.
"New Fortress have now solved this challenge by utilising ship-to-ship transfer of LNG from Golar Arctic on to smaller LNG carriers to service a number of locations within the country of Jamaica."
Golar Arctic is scheduled to load the first LNG cargo in support of this new business "during March 2016". Golar and New Fortress believe this new approach to delivering LNG to niche markets has wide application within the Caribbean and other similar markets around the world, stated Golar.
"New Fortress have, with their entrepreneurial approach to business development, shown that downstream LNG markets can be developed within a much shorter time frame than is customary. Similar fast-track solutions will be essential if consumers are to benefit from the large incremental volumes of LNG that will be delivered to market over the next three-four years," stated Golar.
The Financial Gleaner sought a project update from both JPS and New Fortress, but none came up to press time.
Golar LNG this week reported a fourth-quarter adjusted operating loss of US$35.9 million.