LNG delay understandable

The former head of the Government's liquefied natural gas (LNG) steering committee Chris Zacca, is downplaying the impact of the extended delay in the introduction of this product to the country's fuel mix.

Zacca, who now heads the Private Sector Organisation of Jamaica, told a recent Gleaner Editors' Forum that criticisms about the State's slow movement on this critical matter are unfounded.

"I have made the point consistently that if you had all the LNG in the world today, you would have to burn it in your stoves at home because there is nowhere to burn it, so you have to combine your schedule to their (the Jamaica Public Service Company's) schedule to build a new power plant," said Zacca.

Without that generating plant there is no project, so the delays are not an issue," added Zacca.

For years the price of LNG was a fraction of the price of oil, but with increased demand for natural gas in recent years the price has started to increase, with a recent Morgan Stanley research document showing the price at December 2011 more than double what it was in December 2010.

LNG was priced at approximately 50 per cent of oil in 2010.

"Our problem with fuel in this country has resulted ... from us trying to make the best be the enemy of good. If we had moved 10, 12 years ago to a new fuel solution, whatever it may have been, even though it might not have been perfect at the time by, now we would have been way ahead of the game," said Zacca.

According to Zacca, "LNG is not going to come in, no matter what way you do it, at a fraction of the cost of oil. I think, if we are lucky, we can get it 20 per cent below the current price (of oil)."