Two other Caribbean countries, the Dominican Republic and Jamaica, are challenging Trinidad and Tobago’s position as the liquefied natural gas (LNG) exporting hub of the region.
With all studies on the substitution of heavy fuel oil (HFO), bunker C and diesel in regional electricity utilities agreeing that gas, specifically LNG, is the best replacement fuel, the hub concept as the best distribution method is now under active consideration.
With an eye on importing LNG produced from relatively-inexpensive shale gas in the U.S., the Dominican Republic has put itself forward as the natural receiving point for such cargoes and for the shipment to other states in the region of surplus product the Spanish-speaking country itself does not need.
The Dominican Republic’s former energy and mines minister, Pelegrin Castillo, made this case strongly to U.S. Energy Secretary Ernest Moniz during the Energy Security Summit hosted by Vice President Joe Biden in Washington in January.
Castillo no doubt felt his position has been bolstered by the Castalia Strategic Advisors feasibility study for the Inter-American Development Bank (IDB) last year on “Natural Gas in the Caribbean,” which came down firmly on the Dominican Republic’s side in this matter, noting:
“The Dominican Republic may be the best option for a physical hub in the Caribbean because it is centrally located and because AES Dominicana (power company) already has LNG facilities and operations in place” (only because, ironically, Trinidad and Tobago has been exporting LNG to the Dominican Republic since 2003 because the country itself has no gas fields).
Jamaica has now inserted itself into the picture, although it also has no local gas production and does not even enjoy the infrastructure for LNG importation of which the Dominican Republic can boast.
During U.S. President Barack Obama’s visit to Jamaica in April, the same Dr. Moniz, perhaps forgetting what he had done three months previously, signed a Statement of Intent (SOI) with Jamaica’s energy minister, Phillip Paulwell, which included assistance to Jamaica in its LNG hub ambition.
Minister Paulwell declared unequivocally that “the government is aiming to have Jamaica identified as a possible hub, allowing natural gas to be delivered to the rest of the region.”
The SOI also includes the provision of technical assistance for the modernisation of Jamaica’s energy facilities, fuel diversification, especially relating to the acquisition of natural gas, development of renewable energy (RE) and the strengthening of the country’s governance framework for energy.
Conceding that the CARICOM country had no infrastructure of any kind that would facilitate the importation and re-export of LNG, Minister Paulwell observed that “Jamaica has attempted for many years to implement an LNG project, but we have been hindered because we just did not have access to LNG, so it is an important achievement in obtaining U.S. support for our accessing natural gas.”
In his willingness to go along with these “LNG hub” ambitions of Caribbean countries, Dr. Moniz is, of course, looking after U.S. interests, rather than Caribbean interests.
The more markets the U.S. can obtain for the LNG export plants that are likely to come onstream there in the near future, based on inexpensive shale gas, the better it will be for parties in the U.S.
But where does all this leave Trinidad and Tobago, already the de facto LNG exporting “hub” of the region, based on its indigenous gas resources? LNG is already sold to Puerto Rico and, as noted, to the Dominican Republic from the Atlantic complex at Point Fortin.
Additionally, the proposed Caribbean LNG plant at La Brea is already targeting Martinique and Guadeloupe, with Guyana also in the frame.
Analysts point out that Caribbean LNG and perhaps Atlantic itself, now that Royal Dutch Shell is the largest shareholder, need to act swiftly to tie up as much of the Caribbean market for LNG as possible before the Dominican Republic and Jamaica can move any further on this matter.