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JPS inks Bogue natural gas deal

Published:Tuesday | July 23, 2013 | 12:00 AM

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

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

JPS said yesterday that the preliminary agreement gives the consortium permission to commence a front end engineering and design (FEED) study which will provide more accurate costing for the project.

Contract to be signed

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

Under this first phase 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 to be delivered to JPS's turbines.

JPS has the option to walk away from the contract if the price of the gas delivered is in excess of 10 per cent more than the originally proposed price.

JPS has been actively pursuing natural gas for the Bogue plant since 2008. At the time, a government guarantee was required which did not materialise and the project fell through. No guarantee is currently required.

Since 2008, JPS has held discussions and has been in negotiations with a number of potential gas suppliers, culminating in yesterday's announced agreement with the companies.

JPS said the main objective of the project was to reduce the price of electricity to consumers by bringing fuel diversification to the plant.

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