Sat | Nov 18, 2017

Natural Gas Conference 2017 | Red Stripe wants incentives for converting to LNG

Published:Thursday | October 12, 2017 | 12:07 AM
The Red Stripe Jamaica brewery at Spanish Town Road, Kingston.
Dianne Ashton-Smith
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Local beer manufacturing company, Red Stripe, is appealing to the Government to provide incentives to companies modernising their plants, in the process ensuring a cleaner environment.

Head of Communication at Red Stripe, Dianne Ashton-Smith, made the call against the background of the US$400-million (J$5.2 billion) investment made by the company to upgrade its plant to use liquefied natural gas (LNG). That move is expected to result in significant savings for the manufacturer. It also makes Red Stripe the first fully private company in Jamaica to go the LNG route.

The Jamaica Public Service (JPS), which received its first shipment of LNG from United States-based New Fortress Energy in August 2016, is 20 per cent owned by the Jamaican Government.

Ashton-Smith was speaking last Thursday at the first ever natural gas conference at The Jamaica Pegasus hotel in New Kingston.

She argued that it was time for the Government to consider some form of protection of the industry against increases in the special consumption tax to make it more appealing for other companies to convert to LNG.

Ashton-Smith said such a move would encourage more companies to go that route. An added boost would be for the Government to consider placing incentives on duties to import all equipment and accessories that use LNG, said Ashton-Smith.

And she is imploring the Government to consider a tax credit on the environmental protection levy and income tax, since converting to LNG is a "green initiative".

... New plant to increase electrical, steam output

According to Dianne Ashton-Smith, head of communication at Red Stripe, the company decided to convert its previously upgraded plant to LNG as soon as the natural gas became available from New Fortress Energy in the United States following a lifting of restrictions in the country. The contract includes the supply of natural gas by New Fortress for the next five years.

Red Stripe will also convert its main steam boilers from using heavy fuel oil to natural gas. The new plant will increase electrical output using natural gas from 2.0 megawatts to 3.1 megawatts, a 30 per cent increase in electrical power output. It will also increase steam output by 30 per cent. The improvements will allow Red Stripe to reduce its greenhouse gas emissions by roughly 6,000 tons per annum, resulting in annual savings of some €300,000.

The upgrade of the Red Stripe plant started in 2014.

"We received our first container with LNG (last week Wednesday), and today (last week Thursday) we go live with LNG," Ashton-Smith told the first ever natural gas conference at The Jamaica Pegasus hotel in New Kingston.

The conference is exploring the benefits and challenges of introducing the fuel into Jamaica's energy mix and is being held jointly by the Office of Utilities Regulation and the Petroleum Corporation.

 

Major objective

 

The major objective of the conference is to foster greater understanding of the implications of the introduction of natural gas to the Jamaican market, particularly as it relates to the anticipated economic impact, projected commercial opportunities, as well as the governance and regulation of the emerging industry.

The conference theme is 'New Horizons: the Development of a Natural-Gas Sector in Jamaica Prospects And Challenges', and attracted participants from the public sector, including ministries of finance and the public service; science, energy and technology; and transport; industry, among others.