Tue | Aug 4, 2020

BUSINESS: JPS, consortium sign agreement for supply of natural gas

Published:Monday | July 22, 2013 | 6:32 PM

The Jamaica Public Service Company (JPS) and a consortium of companies led by Fueling Tech Incorporated (FTI) International Group have entered into an agreement to introduce natural gas at the Bogue power plant in St. James.

Other members of the consortium are Virtual Solutions Inc. of Dubai, United Arab Emirates and Red Rock Power Partners out of the United States.

The agreement is preliminary to one that is to follow in six months.

Minister of Industry, Investment and Commerce, Anthony Hylton said the agreement gives the consortium permission to commence a Front End Engineering and Design (FEED) study which will provide more accurate costing for the project.

In six months’ time a formal contract may be signed by the parties to facilitate the implementation of the project.

Under the first of the agreement, the consortium is required to finance the FEED study, which will determine the final design of the compressed natural gas infrastructure delivery along with the price of gas delivered to JPS’ turbines.

JPS has the option to walk away from the agreement if the price of the gas delivered is greater than 10 per cent of the originally proposed price.

JPS has been actively pursuing the conversion of a combined cycle plant at Bogue since 2008. At the time, a government guarantee was required which did not materialize and the project fell through. No guarantee is required presently.

Since 2008 JPS has held discussions and has been in negotiations with a number of potential gas suppliers, resulting in the current agreement with the companies.

In a statement issued at a signing ceremony at Jampro’s offices in New Kingston yesterday, JPS said the main objective of the project is to reduce the price of electricity to consumers.

The company has set a December 2015 deadline for conversion works to be completed and the plant to start receiving natural gas.

“In light of the high dependency of the country’s generating facilities on liquid fuel and the lack of fuel diversification, Bogue Power Plant presents the best opportunity at this time for a significant step of fuel diversification for the island,” the JPS said.

“This will cut the dependence of the plant on diesel oil and present a perfect fit for the combined cycle gas turbine efficiency,” the company added.

The gas project at Bouge is part of JPS’ overall fuel diversification programme, which includes the construction of a 6 megawatt hydroelectric power plant in Maggotty St. Elizabeth and which is expected to come on line in early 2014.