Mon | Jun 14, 2021

Trade Winds inks deal with New Fortress on LNG conversion

Published:Friday | January 15, 2021 | 12:10 AMKarena Bennett - Business Reporter
File 
Peter McConnell, managing director of Trade Winds Citrus Limited.
File Peter McConnell, managing director of Trade Winds Citrus Limited.

Beverage maker Trade Winds Citrus Limited is converting from bunker oil to liquefied natural gas as fuel source for the company’s steam generator plant, or boiler, and has hired New Fortress Energy to supply the LNG.

Eventually, Trade Winds aims to become energy self-sufficient, supplying its own electricity for the 20-acre manufacturing complex, orchards and other lands it operates at Bog Walk; but for now, the LNG conversion covers only a portion of the operation, that is, only areas of the juice plant that is linked to the steam generator, said Managing Director Peter McConnell.

Over time, the company expects to reduce its energy bill by one-fifth.

All the equipment needed to do the conversion from Bunker-C fuel to LNG is already on the island, said McConnell, but the company is awaiting approval from the National Environment & Planning Agency, NEPA, to begin the installation.

“Once approval is granted, this phase will start and last for about four weeks. The expected start-up date is late February to early March,” McConnell said.

Under the arrangement with New Fortress, the natural gas trader is responsible for supplying Trade Winds with the equipment, the cost of which the juice maker will repay under the LNG supply contract.

Trade Winds is spending US$67,000 on the boiler conversion.

But: “We do not know the cost of the LNG infrastructure – tanks, piping, etc. That is being undertaken by New Fortress,” the MD said.

McConnell expects to recover the cost of Trade Winds’ investment during the first year of operation, after which the beverage company is projecting savings of 20 per cent annually on its energy bill.

“LNG will now provide 100 per cent of the energy used to generate steam in our operation. Unfortunately, this aspect of energy consumption is only a small fraction of our total energy needs; it, however, is a start on our road towards improving the cost of energy in our operations,” he said.

Trade Winds’ move towards LNG as its energy source comes amid the company’s acquisition of neighbouring rival Jamaica Beverages Limited, which fast-tracked Trade Winds’ entry into the diary market. That complex, spanning eight acres, is not yet part of the LNG conversion programme.

The beverage maker and producer of flagship brand Tru-Juice is just the latest corporation to convert to LNG, all utilising New Fortress as supplier. The American energy company has been the sole operator in that space in Jamaica since 2016 and last disclosed that it has 15 active contracts in this market.

“This is our first initiative to use LNG or other sources of renewable energy in our operation; however, we have explored various other opportunities, including solar,” McConnell said. “Based on our analysis, it is cost-effective to invest in an LNG-powered generation plant and produce our own electricity.”

Trade Winds had initially targeted June 2020 for the conversion but the COVID-19 coronavirus intervened, delaying the roll-out.

“We will certainly look back at this LNG project once the economy rebounds, as Trade Winds is always looking for ways to not only increase revenues, but reduce expenses,” he said.

karena.bennett@gleanerjm.com