Dr. Vincent Lawrence ESET sets 2017 for 381 MW Project - Why JPS Co says LNG even though Ethane and Propane cheaper as Hydrogen Economy possible

The Dr. Vincent Lawrence led six-member ESET (Electricity Sector Enterprise Team) has finally spoken; Jamaica Electricity Generating fuel will be LNG. Just not by one large entity but by a consortium of local and international players, including the JPS Co.

His team put forward a proposal for several local entities to upgrade their generating capacities to LNG (Liquid Natural Gas) and Coal and expects the overall Project, which will now consist of several smaller Projects to be completed by 2017 missing the 2016 deadline as noted in the article “Lawrence announces several initiatives to replace 381MW Project”, published Thursday September 18, 2014, The Jamaica Gleaner.

ESET will be working with these 2 companies and assessing the feasibility of any proposed ideas that they have with a 2017 Timeline to tie these Plants into the JPS Grid as stated in “Government confirms 2017 deadline for 381 megawatt Project”, Published Wednesday September 17, 2014 1:47 pm, The Jamaica Gleaner.

To quote Dr. Vincent Lawrence: “We also plan to commission independent appraisals... to ensure that Jamaica receives value for the money, and we want support of our team in negotiations with the Project sponsors, including JPS and the co-generational developers”.

Even more ambitious is that ESET still sees the 30% reduction in real electricity costs as being possible.

ESET was established after EWI (Energy World International) failed to pay up the up the US$36.85 million Performance Bond on time. They paid on Thursday April 24th 2014, which is ten (10) days after receiving the Energy License from the OUR as noted in my blog article entitled “China Harbour Engineering Company possibly EWI's 381 MW LNG Project Angel Investor – Writing Big CHEC via China Ex-IM Bank is Drake's Started from the Bottom now we’re here”.

For this mis-step, as well as failing to provide proof that they could finance the building of the US$737 million LNG Power Plants, they lost the Bid. Enter Civil and Geotechnical Engineer, Dr. Vincent Lawrence and the establishment of the ESET Team as mentioned in my blog article entitled “Dr. Vincent Lawrence to oversee the 381 MW LNG Project - All powerful Essene Brotherhood to Resurrect PNP General Election 2016 Win like Osiris”.

ESET says 2017 for 381 MW Project - Upgraded Coal and LNG Plants instead of a single Project

The Projects, which were detailed by ESET on Wednesday September 17^th 2014 at a Press Briefing at Jamaica House in St Andrew, detailed the involvement of several Local Electricity Generating companies:

1.      JAMALCO

2.      ALPART

3.      Jamaica Public Service Company

First, ESET plans to upgrade JPS Co Generating capacity by upgrading or replacing older Plant with LNG or Coal by 2015 as follows:

1.      120MW Bogue Power Station in Montego Bay, St James

2.      190MW gas turbine Plant replacing the 292 MW HFO (Heavy Fuel Oil) power Plants at Old Harbour in St Catherine and Hunts Bay in St. Andrew

Next they'd await UC Rusal upgrade of in the ALPART and Kirkvine refineries Electricity Generating Plant, which they plan to tie into the grid via a 138 KVA Transmission line. Good to note UC Rusal is dabbling with options other than Coal and LNG in the form of Ethane since July 2014 as explained by UC Rusal Manager Igor Dorofeev in the article “Rusal Exploring Ethane For Alpart Plant”, Published Sunday July 20, 2014 by Daraine Luton, Senior Staff Reporter, The Jamaica Gleaner.

This behavior by UC Rusal is odd, considering that they'd agreed with the Ministry of Science Technology Energy and Mining in May 2014 to 2 year concession on paying the Bauxite Levy in exchange for them building a Coal-Fired Refinery to refine Bauxite at ALPART into Alumina as stated in “Gov’t and UC Rusal to Conclude Discussions on Bauxite Plants”, published May 7, 2014 By Andrea Braham, The Jamaica Information Service and “UC Rusal granted additional two-year bauxite levy concession”, published May 7, 2014, RJR News.

JAMALCO is now owned by Noble Resources Limited since July 2014 a company that has the capacity and has expressed plans to replace the use of Bunker C Oil with Coal as noted in my blog article entitled “JAMALCO sold to Noble Resources Limited as ALCOA pulls out – UC Rusal stalling on ALPART and Kirkvine refineries as Xinfa Group Company interested”.

Their generating capacity along with the JPS Co is expected to come online by 2017. All told, this basically covers the 381 MW and open up the possibility of an additional 120MW capacity in 2023.

With JAMALCO and ALPART shrouded in uncertainty, it's good to focus a bit on JPS Co's plans, which sound more concrete.

JPS Co stands firmly with LNG - Ethane and Propane cheaper but hard to source than LNG

JPS co is still firmly committed to LNG as stated in the article “JPS still targeting LNG for replacement capacity”, published Friday July 11, 2014 by Avia Collinder, Business Reporter, The Jamaica Gleaner. According to JPS Chief Financial Officer Dan Theoc, LNG is what they’re sticking to due to availability, quote: “We are focusing on new, more efficient generation units fired by natural gas. The timeline really depends on the availability of gas and our ability to raise financing specific to a gas solution and the required credit support”.

Oddly enough, albeit JPS Co signed an agreement with FTI (Fueling Tech Incorporated) to do a FEED (front end engineering design) to assess the feasibility of converting 120MW Bogue Plant in Montego Bay from Diesel fuel to Natural Gas, they are yet to commit to this Project.

This has irked Vice President of business development for the FTI consortium Tony Gardner, who will not commit financial resources to a FEED until JPS Co CEO Kelly Tomblin give a clear indication that they intend to go ahead with the Project as stated in the article “JPS leaves natural gas partner hanging - FTI consortium awaits supply agreement, puts engineering studies on hold” Published Friday September 19, 2014 by McPherse Thompson, Assistant Editor - Business, The Jamaica Gleaner .

JPS Co currently manages the following amount of power capacity:

1.      820MW of total capacity

2.      197MW from IPPP (Independent Power Purchase Prodders)

3.      23MW from Hydroelectric Power

Good to note here that Hydroelectric power generation is down some 15% due to the ongoing Drought in Jamaica as noted in my blog article entitled “JPSCo says Hydroelectric down 15% - Unreliable Rainfall due to Climate Change as Solar and Wind fill 115MW Renewable Energy Contract”.

JPS Co has no plans to go with Propane or Ethane as other are considering, despite the lower price of Propane and Ethane as shown below:

1.      US$4 per 1,000 cubic feet for Natural gas

2.      US$0.30 per gallon for Ethane

3.      US$1 per gallon for Propane

Despite the apparently cheaper price, JPS Co Senior Vice President for Generation and Project Development John Kistle says the long-term stability of LNG was a key factor, pointing out the other two were hard to source and had no established markets.

To quote JPS Co Senior Vice President for Generation and Project Development John Kistle: “JPS has valued each of the known options as well as assessed the risks associated with delivery and operation. When considering the global availability and supply mechanisms for each of these fuels that are available to Jamaica, LNG provides the best long-term pricing and lowest operating risk”.

LNG Project spinoff benefits - JUTC Maintenance Costs lowered as Hydrogen Economy possible

The LNG Project has multiple benefits. Aside from the employment of some 4000 employees during the construction phase and the resulting reduction in electricity costs, the eventual goal, it also has the desired spinoff of making transportation cheaper in Jamaica!

This as the excess LNG in the island could be used as motor vehicle fuel. It would result in lower maintenance costs for JUTC (Jamaica Urban Transit Company) Buses, as they could switch to cleaner burning LPG (Liquid Petroleum Gas) as explained in my blog article entitled “JUTC faced PAAC on Wednesday September 17th 2014 – JUTC Buses can’t run on ULSD as LPG Better for the JUTC Buses Fuel Injectors”, which is easily derived from LNG.

LPG derived from LNG could eventually become the fuel that everyone uses on the Island of Jamaica for their motor vehicles with the added benefit of their engines running cleaner and lower maintenance costs. More importantly, it may lead to Jamaica making the eventual transition to a Hydrogen Economy as prophesied in my blog article entitled “Senator Phillip Paulwell chooses LNG over Coal - Power Engineers in Stephen King's Graveyard Shift”.

JPS co now just has to commit to LNG via a FEED Study with FTI to set the grand 381 MW Project in motion as planned by Dr. Vincent Lawrence and the ESET Team.