Will JPS save the LNG project?

The much maligned and criticised Jamaica Public Service Company (JPS) could be the one to save the Government's floundering liquefied natural gas (LNG) project, which will bring cheaper electricity to Jamaicans.

Having stuck to the letter of the law and prevented the parent company of the JPS, Marubeni Corporation, from bidding to supply LNG to Jamaica, the Government now seems ready to eat humble pie and beg the firm for help.

Marubeni had wanted to submit a bid to supply the LNG to Jamaica but was disqualified after it arrived minutes after the 5 p.m. deadline.

However, with the qualified bidders offering prices that would not lead to any appreciable decline in the cost of electricity to Jamaicans, it appears negotiations are set to be initiated with Marubeni.

"The prices quoted by the bidders are much higher than Jamaica can pay and would not attract the JPS or the bauxite companies," a source close to the talks told The Sunday Gleaner.

long-term deal

"So what will happen now is that efforts will be made to get a long-term deal for Marubeni to supply the gas at a cheaper price because that is the only way the country will see the introduction of LNG," added the source.

There has been no official word from the LNG Steering Committee or Energy Minister Phillip Paulwell on this development, but with the price of LNG increasing on the world market, every effort is being made to ink a deal quickly.

"Marubeni has a more-than-vested interest in getting a cheaper energy source into the Jamaican mix because only with lower prices will the JPS be able to compete, if Paulwell achieves his objective of ending its monopoly in the transmission and distribution of electricity in Jamaica," the sources claimed.

The JPS has already announced plans to invest US$616 million (J$53 billion) to construct a new LNG plant in Old Harbour, St Catherine, but that could be abandoned if the Government fails to guarantee a steady supply of the gas at a reasonable price.

If the company goes ahead with the construction without an LNG programme in place, it would be forced to run the plant on diesel, and although that could produce electricity cheaper than the present rate, the reduction would not be significant.