Jamaica has been making the news for its aggressive drive to diversify away from its traditional reliance on imported oil, with both renewable energy and natural gas featuring strongly. The demand for natural gas for power generation is increasing. Several new facilities in Jamaica have also come on stream to use natural gas as a fuel, including Red Stripe brewery, and bauxite mining and alumina producer, Jamalco. With no domestic gas production as yet, Jamaica has turned to imports of liquefied natural gas (LNG).
The rationale for this has been the need to ensure stability on the Jamaican energy grid and diversity within their energy mix. The key investment for Jamaica is the investment into LNG regasification to ensure a reliable supply of gas. According to reports out of Jamaica, the utility, Jamaica Power Company (JPC) has struggled with intermittency from renewables and has invested heavily in storage and new gas-powered power facilities to deliver a secure busload and to ramp up when solar and wind power are not available.
The newest development is a new natural gas-powered plan in Old Habour, Jamaica. JPC signed an Engineering Procurement and Construction (EPC) contract with Spanish energy services company, TSK, for the engineering, procurement and construction of the plant. The new facility will be a 190 mw facility and is estimated that the total project cost is in the vicinity of US$330 million. According the Gleaner, General Manager of SJPC, Dan Theoc, speaking at the signing ceremony, noted that the new power plant would facilitate the addition of more natural gas to the fuel mix. The supplier of LNG to the power plant, however, is New Fortress Energy.
According to ICIS, UK-based utility, Centrica, will supply LNG to Jamaica under a three-year agreement, according to market sources. The deal would be via US-based New Fortress Energy, which has an agreement to supply the utility, Jamaica Public Services (JPS).
Currently, New Fortress Energy has a floating storage unit – the Golar Artic – under charter which has a capacity of 138,000 cubic metres.
According to ICIS, the Golar Arctic loaded a commissioning cargo from Nigeria LNG in July 2016 before arriving in Jamaica in August 2016. But since then, New Fortress Energy has not received commercial supply and has been seeking new supply.
With the Centrica deal, the company will deliver as many as three cargoes to Jamaica in the first year, and up to four cargoes in the second year, one source said.
Back in August 2015, New Fortress Energy signed a contract with JPS to deliver LNG to supply gas for its LNG powered plants in Bogue, Montego Bay and now the new plant at Old Harbour.
In addition to the power sector, manufacturers are also going the route of LNG. Red Stripe, a beer manufacturer, estimates that conversion to gas to power its brewery operations will lead to savings of more than US$336,000 per year. According to the brewery, the project is expected to reduce greenhouse gas emissions by approximately 6,000 tonnes per annum. Gas will power Red Stripe's combined heat and power plant, boosting output by over 50 per cent.
According to the Gleaner, Ricardo Nuncio, Red Stripe Managing Director, said that, ‘The sustainability and operational capabilities that are made possible by LNG make our partnership with New Fortress Energy a win for the environment and our business.’ "Red Stripe continues to focus on changing the way we operate throughout the entire supply chain so that we can deliver on our commitment to making a positive environmental impact," he said.