Wedderburn clarifies his role in Exmar controversy
Published:Tuesday | July 12, 2011 | 12:00 AM
THE EDITOR, Sir:
I see that The Gleaner has published a clarification in relation to its editorial of Sunday, June 26, 'Place nuclear on the agenda'. I don't know what prompted this clarification, but I do appreciate The Gleaner's willingness to admit where it has made mistakes. I had actually meant to contact the paper earlier in relation to the editorial, which contained two blatant errors and one understandable error.
The clarification dealt with the first blatant error - the claim that I had a private business arrangement with Exmar. In fact, I have never had any business arrangement with Exmar. They happened to be one of a number of parties seeking to participate in a proposed project in which I was also involved and, as noted in your clarification, I had disclosed this fact to relevant officials prior to rejoining the Petroleum Corporation of Jamaica.
The second blatant error was that I was part of a group that evaluated Exmar's bid. This is absolutely not true. If you read the Office of the Contractor General (OCG) report carefully, you will see that I participated in preparatory meetings of the evaluation team PRIOR to the start of the actual evaluation of bids. This participation was at the express invitation of the evaluation team chairman in order to educate the team on the basics of the LNG industry and to explain to them the requirements of the request for proposal. I was not involved in any way once the evaluation team actually started the evaluation of the bids.
The understandable error is that I excluded a potential bidder. This error is understandable because the OCG seeks to make the same argument. However, the OCG report does not make it clear that I had no decision-making power in such matters. When the relevant potential bidder expressed an interest, I relayed this interest to my superiors, and it was my superiors who took the decision that the request for participation could not be accommodated at the stage the process had reached.
I also note that in all the hype about this potential bidder being a serious rival to Exmar, it seems to have been conveniently forgotten that Exmar and this company share a strong partnership. This company has, to date, never done a project without having Exmar as a partner and ALL its floating storage and regasification unit (FSRU) operations are done through Exmar, i.e., without Exmar this company has no actual experience in operating FSRUs.
Important points
In this respect, it is important to note that the operation of an LNG FSRU in Jamaica will be more demanding than any other FSRU project which has been done elsewhere in the world. In most other projects, the LNG FSRU is a supplement to pipeline natural gas, so if the FSRU fails, there may be a shortage, but not a complete outage of gas.
Additionally, in most other projects, the need for the gas from the FSRU is seasonal, and there is thus an available period in which maintenance can be conducted on the FSRU, while it is scheduled to be out of service.
In Jamaica's case, the FSRU would be our only source of gas and would be expected to run continuously, 24/7, 365 days per year, with maintenance being done while the FSRU is still operating. In this context, it is obvious that prior FSRU operational experience is an absolutely critical requirement for Jamaica. In my view, we cannot afford to take on any company that would be operating an FSRU for the first time and using Jamaica as their learning experience. This is why I had, at one time, made the recommendation - which wasn't accepted - to the Government that the tender should be limited to just the three companies in the world that have actual LNG FSRU operating experience: Exmar, Golar LNG and Hoegh LNG.
I would still make this recommendation today. Going outside this group will be an extremely risky strategy for Jamaica.
STEPHEN WEDDERBURN