The agreement signed yesterday between the Energy departments of the Jamaican and US governments would see Liquefied Natural Gas or LNG, being supplied to Jamaica at a cheaper rate than was proposed last year by the controversial Hong Kong based firm, Energy World International, EWI.
That’s according to Energy Minister, Phillip Paulwell.
Minister Paulwell had identified EWI’s proposal to supply LNG at a cost of 12-point-88 US cents per kilowatt hour, as the benchmark for any future LNG projects.
For years, the government’s push to construct a base-load generation plant fueled by LNG, has been unable to get off the ground.
In 2012, a plan by JPS to build a 360 megawatt power plant crumbled when they couldn’t source LNG at a cheap enough price.
The government put the project out to tender, but none of those proposals materialized either.
That included one by EWI, which was never able to convince authorities that it had a reliable source of LNG.
But now, the United States is opening up its vast shale gas reserves for export to the Caribbean.
And it will be cheap.
According to Minister Paulwell, Jamaica would begin benefiting from the cheap LNG once JPS’s 190 megawatt plant is completed in 2017.
If as is proposed, Jamaica is established as the LNG hub for the Caribbean, then the country could get LNG even cheaper, provided it orders a large volume of the gas.
Despite these new initiatives coming out of the United States, Minister Paulwell says Jamaica’s participation in Petrocaribe will not be affected.
In fact, he foresees an increase in oil imports under the Venezuelan programme.
Minister Paulwell says the government hopes these initiatives will help slash its annual 14-billion dollar electricity bill by over 20-percent.