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EWI said to adjust LNG project - Planning separate plants in MoBay and Bull Bay
Published: Wednesday | March 12, 2014 0 Comments
Energy World International (BWI), the Hong Kong-based firm that won the bid to establish a gas-fired power plant in Jamaica, known as the 360MW project, now plans to split the project in two segments, with facilities in the parishes of St James and St Thomas, informed sources say.
The restructuring would not change the US$737-million projected cost of the project, they say. EWI is expected to formally update the Office of Utilities Regulation (OUR) this week on its recrafted engineering, these sources add.
The OUR is still awaiting final details from EWI about how it plans to finance the project - Wednesday Business sources hinted that the bulk would from its own resources - before recommending to Energy Minister Phillip Paulwell whether he should issue EWI an electricity generating licence, allowing it to commence construction.
EWI's original idea was to construct a single facility at Old Harbour, St Catherine, near the site with Jamaica Public Service Company (JPS), the monopoly distributor of electricity, now operates old, inefficient, oil-fired power plants, which are to decommissioned when the EWI project is completed.
NEARER TO DEMAND
EWI also planned a liquefied natural gas (LNG) storage and regasification facility at nearby Port Esquivel. It would then pipe the gas from that facility to its own power plant and any other customer it may have acquired.
The LNG requirement is around 350 million tonnes of gas annually.
"The plan now is to have two generating facilities - the larger one near Bull Bay, St Thomas, and the other at Bogue in St James," according to one source familiar with EWI's thinking. "The idea is to have the power plants nearer to the demand for power and fuel."
It was not immediately clear what would be the split of the generating capacities of the two sites, although the sources say that EWI is already in negotiations with Siemens Energy for the manufacture of the turbines, two of which would be installed at Bull Bay and another at Bogue in Montego Bay.
"It makes sense for EWI, as they see it, to proceed as they now plan," explained one source. "The north coast is the major tourism centre, where there is substantial demand for electricity, and therefore an important area for installing generating capacity. Further, the JPS's (120-megawatt) plant is expected to convert to gas so having a gas, facility in that area would be cost-effective."
There would be no need to install pipelines across difficult mountainous terrain to deliver the gas, or to transport it by road.
JPS has contemplated taking a stake in the EWI project, but yesterday the light and power company's spokesperson, Winsome Callum, said a decision has not yet been taken and that much would depend on the OUR's determination on EWI's ability to finance the project - a matter on which the regulator has requested additional information.
"There are some decisions to come out of that due diligence," Callum told Wednesday Business.
On JPS's plan to convert its Bogue plant to gas, Callum said "that is definitely on the cards", but indicated that a final decision on a gas supplier would depend on the capacity to supply and price.
GAS-DELIVERY DEAL
Last July, JPS signed an agreement with a consortium, led by the US firm, Tech Incorporated (FTI) International Group, on the feasibility of a gas-delivery deal for Bogue. But not much has been heard of the project now presumed to have taken a back seat to the possibility of a broader arrangement with EWI.
Callum, however, explained that while JPS was looking that the possibility of "EWI bringing in gas", there would have to be price comparisons between its delivery and any other opportunities.
"We have a responsibility to use the cheapest source," she said.
With regard to EWI's proposed Bull Bay facility, the sources say that it would be constructed on the mined-out limestone area, near to relative deep waters, which would require only limited dredging to accommodate the LNG delivery ships.
"The area for the power plant itself is solid, so there would be no need for compact to build the plant," according to one source. "That would save money."
Initially, it had been suggested that the power plant at Old Harbour would have the advantage of being relatively close to infrastructure for tying into the JPS's grid. But the sources insist that this was overstated in terms of distance.
In any event, they say that infrastructure would be needed for expensive upgrade and the cost of building a new one would be offset by the other savings from the plants proposed build-out at Bull Bay.
Published: Wednesday | March 12, 2014 0 Comments
Energy World International (BWI), the Hong Kong-based firm that won the bid to establish a gas-fired power plant in Jamaica, known as the 360MW project, now plans to split the project in two segments, with facilities in the parishes of St James and St Thomas, informed sources say.
The restructuring would not change the US$737-million projected cost of the project, they say. EWI is expected to formally update the Office of Utilities Regulation (OUR) this week on its recrafted engineering, these sources add.
The OUR is still awaiting final details from EWI about how it plans to finance the project - Wednesday Business sources hinted that the bulk would from its own resources - before recommending to Energy Minister Phillip Paulwell whether he should issue EWI an electricity generating licence, allowing it to commence construction.
EWI's original idea was to construct a single facility at Old Harbour, St Catherine, near the site with Jamaica Public Service Company (JPS), the monopoly distributor of electricity, now operates old, inefficient, oil-fired power plants, which are to decommissioned when the EWI project is completed.
NEARER TO DEMAND
EWI also planned a liquefied natural gas (LNG) storage and regasification facility at nearby Port Esquivel. It would then pipe the gas from that facility to its own power plant and any other customer it may have acquired.
The LNG requirement is around 350 million tonnes of gas annually.
"The plan now is to have two generating facilities - the larger one near Bull Bay, St Thomas, and the other at Bogue in St James," according to one source familiar with EWI's thinking. "The idea is to have the power plants nearer to the demand for power and fuel."
It was not immediately clear what would be the split of the generating capacities of the two sites, although the sources say that EWI is already in negotiations with Siemens Energy for the manufacture of the turbines, two of which would be installed at Bull Bay and another at Bogue in Montego Bay.
"It makes sense for EWI, as they see it, to proceed as they now plan," explained one source. "The north coast is the major tourism centre, where there is substantial demand for electricity, and therefore an important area for installing generating capacity. Further, the JPS's (120-megawatt) plant is expected to convert to gas so having a gas, facility in that area would be cost-effective."
There would be no need to install pipelines across difficult mountainous terrain to deliver the gas, or to transport it by road.
JPS has contemplated taking a stake in the EWI project, but yesterday the light and power company's spokesperson, Winsome Callum, said a decision has not yet been taken and that much would depend on the OUR's determination on EWI's ability to finance the project - a matter on which the regulator has requested additional information.
"There are some decisions to come out of that due diligence," Callum told Wednesday Business.
On JPS's plan to convert its Bogue plant to gas, Callum said "that is definitely on the cards", but indicated that a final decision on a gas supplier would depend on the capacity to supply and price.
GAS-DELIVERY DEAL
Last July, JPS signed an agreement with a consortium, led by the US firm, Tech Incorporated (FTI) International Group, on the feasibility of a gas-delivery deal for Bogue. But not much has been heard of the project now presumed to have taken a back seat to the possibility of a broader arrangement with EWI.
Callum, however, explained that while JPS was looking that the possibility of "EWI bringing in gas", there would have to be price comparisons between its delivery and any other opportunities.
"We have a responsibility to use the cheapest source," she said.
With regard to EWI's proposed Bull Bay facility, the sources say that it would be constructed on the mined-out limestone area, near to relative deep waters, which would require only limited dredging to accommodate the LNG delivery ships.
"The area for the power plant itself is solid, so there would be no need for compact to build the plant," according to one source. "That would save money."
Initially, it had been suggested that the power plant at Old Harbour would have the advantage of being relatively close to infrastructure for tying into the JPS's grid. But the sources insist that this was overstated in terms of distance.
In any event, they say that infrastructure would be needed for expensive upgrade and the cost of building a new one would be offset by the other savings from the plants proposed build-out at Bull Bay.
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