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Deadline for energy

Published:Friday | February 17, 2012 | 12:00 AM
Dan Theoc, chief financial officer of the JPS
Energy Minister Phillip Paulwell

Arthur Hall, Senior Staff Reporter

The Jamaica Public Service Company's (JPS) plan to invest US$616 million (J$53 billion) to construct a new liquefied natural gas (LNG) plant in Old Harbour, St Catherine, could be abandoned if the Government fails to guarantee a steady supply of the gas.

"Quite frankly, this project will not go forward unless we are certain that natural gas is coming to Jamaica, and I mean certain," Dan Theoc, chief financial officer of the JPS, told journalists yesterday.

"We are saying over the next six months the process will be finalised so that we can have certainty on the matter before we move forward in complete earnest with the project," added Theoc even as he expressed confidence that the Government would come through with the LNG supply.

The JPS has already received approval from the Office of Utilities Regulation to construct the plant which would represent one of the largest single investments in Jamaica in decades.

The new LNG plant would allow the JPS to retire some of the old inefficient gas plants, including the B6 generator at its Hunts Bay station.

With construction scheduled to last for 27 months, the JPS says the LNG plant would lead to substantially cheaper electricity rates for Jamaicans by late 2014 or early 2015.

Savings for jamaicans

The new LNG plant would also lead to an estimated annual savings in fuel cost for Jamaicans of about US$300 million (J$26 billion) and create employment for more than 1,200 Jamaicans during construction.

But all that would be shelved if the Government fails to have everything in place for the planned introduction of LNG by October, which is when the JPS expects to begin construction.

Only last week, players in the local energy sector expressed fear that the introduction of LNG would miss the 2014 schedule.

The planned introduction of LNG is already two years behind the initial schedule, but Energy Minister Phillip Paulwell has announced that the Chris Zacca-led LNG steering committee has approved a request from two of the infrastructure providers for a two-month extension of the bid deadline.

However, Paulwell claimed that entities, including the JPS which are setting up LNG, would not be short-changed.

"I have been assured that we are making every effort to ensure that the timeline for completion of the new plants and the infrastructure are synchronised with the timeline for completion of the delivery of LNG," said Paulwell.