Tue | Jan 21, 2020

LNG team pushing for speedy implementation

Published:Thursday | January 13, 2011 | 10:14 AM

The team set up to implement Jamaica’s liquefied natural gas (LNG) ambitions says the project is in jeopardy of failing if some of the advice of a World Bank-recommended team of consultants are adopted.

Several of the recommendations contained in the teams report require a delay in the implementation of the project, but the LNG team is adamant the current timelines must be kept or the project will fail.

The report from the consultants is yet to be released, but the Gleaner/Power 106 News has obtained a copy of the LNG team’s responses to the recommendations contained in the report.

In the document, the LNG team tries to convince, Prime Minister Bruce Golding, who now has ultimate responsibility for the project, that stalling is not a viable option.

The consultants have suggested to the Bruce Golding administration that it should put the LNG plan on hold until the middle of this year while the Office of Utilities Regulations (OUR) develops a new framework for regulating the industry.

Based on the document, the consultants have also recommended a project restart, competitive tendering, and a front-end engineering and design study before pushing ahead with the project.

However, to LNG team says some of must be done in parallel with the ongoing efforts to identify the offtakers, develop the commercial framework and land LNG.

The team says given the country’s long history of false starts in introducing LNG, Jamaica runs the risk of interested parties backing away from the project.

It says the opportunity costs of a delay at this time could run up to 100 million dollars per month and would push the project back at least two years to 2015.

The team has also dismissed concerns that the Government might be left saddled with future gas purchases, because it had failed to obtain both a letter of intent to purchase from the bauxite company Jamalco and a purchase commitment from the Jamaica Public Service Company.

It says the Government of Jamaica would have no financial responsibility for gas purchases.

The team says while it remains optimistic that Jamalco will participate in phase one of the LNG project, the threshold volume would be sufficient to support the venture, even without the bauxite company.