The Bahamas Government Supports Liquefied Natural Gas (LNG) Projects in The Bahamas

Bahamian Government's Policy Decision in Support of Liquefied Natural Gas (LNG) Projects in The Bahamas

Gov’t Supports LNG

By Candia Dames

Nassau, The Bahamas

2 May 2006

The government has made a policy decision that it is not opposed to liquefied natural gas (LNG) projects in the Bahamas, according to Prime Minister Perry Christie, but he still did not give any timelines for when the government hopes to give the green light to any of the energy companies with LNG proposals.

He said LNG "can happen in the country".

"I think we are making good progress," Prime Minister Christie said in an interview with the Bahama Journal, referring to the government’s consultations and review of the proposals.

"We know that the former government had given a commitment to it, but did not allow for some of the developments that have taken place.  I think that we have had an exhaustive review of it and the government has made a policy decision that it is not opposed to LNG in the country and now it is moving forward to the final review of most certainly at least one of the applications before us."

The prime minister was no doubt referring to the Virginia-based AES Corporation, which is proposing an LNG project at Ocean Cay, near Cat Cay and Bimini.  The company wants to run an LNG pipeline to Florida to help meet that state’s growing demand for energy.

But it has had a wait of several years after it received approval in principle from the Ingraham Administration.  One year ago, AES appeared poised to get final approval from the government, but objections from wealthy second homeowners on Cat Cay further delayed a decision on the matter.

The government is also considering a second proposal from Suez and El Paso Corporations, which have combined a proposal for Grand Bahama after first presenting separate plans.

But the CEO of Suez indicated recently that his company had grown weary of the wait for a decision from The Bahamas government and would seek to get approval from the state of Florida for an LNG project off the Florida Coast.

Last week, Deputy Chief of Mission at the U.S. Embassy in Nassau Dr. Brent Hardt said the government should establish timelines for investors so that when they submit proposals they would have an idea of how long it would take to get an answer.

"I think the worst thing for investors is to continue month after month without clarity," Dr. Hardt said.

When he spoke to the Bahama Journal, the prime minister responded to Dr. Hardt’s comments, intimating that the U.S. diplomat was out of line.

"I am surprised at the comments," Prime Minister Christie said.  "That’s like me saying the same thing about the United States of America.  I assume he is well intentioned in saying it, but I think sometimes Dr. Hardt doesn’t realize what a minister or a cabinet has to do in balancing development applications."

He added: "Oftentimes, there is an application that has important policy implications.  For example, LNG was one where some people feel very strongly about opposing the installation or establishment of a facility in The Bahamas and it took time for that process to move forward, more time than those who would have wished it to happen in Florida would have allowed for and so timelines couldn’t help that process."

Mr. Christie said the government needed the time it took to consider the LNG applications and will make an announcement after it is has concluded final review of the proposals.

"That process just had to have time for consideration, the time for consultation and I think people have to understand that a country moving forward with a huge infusion of cash coming into it, inflows, development proposals, the question [is] how far we have to go in developing our country at a time when we don’t even have the manpower to service the construction jobs," the prime minister told the Bahama Journal.

"So, a lot of consideration goes into decision making. Sometimes there are those persons who are looking from outside [who wouldn’t know]."

Florida Power & Light Company (FPL) puts On Hold a Plan to Seal a Deal for Long-term Supplies of Liquefied Natural Gas (LNG)

Florida Power & Light Company (FPL) announced that it was now focusing on other potentially more viable options to meet FPL’s increasing requirements because there appears to be limited opportunity in accessing LNG at this time

Utility Co. Pulls Out Of LNG Plan

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

6th June 2005

Florida Power & Light Company (FPL), which was involved in a partnership with two energy firms to construct a liquefied natural gas terminal in The Bahamas, has announced that it has temporarily put on hold a plan to seal a deal for long-term supplies of LNG.

The announcement has placed the fate of one of the LNG proposals for The Bahamas on an even more uncertain path.

FPL had hoped to carry out an arrangement with El Paso Corp. and Tractebel Electricity & Gas whereby through their partnership, natural gas would have been liquefied, shipped from the source and then re-gasified for delivery to Florida.

Last December, the utility company announced that it had agreed to combine development efforts and resources with the two energy companies "in order to bring a new supply of natural gas to South Florida."

Under that plan, the three companies had planned to carryout one project.  Prior to that, Tractebel and El Paso had been pushing separate LNG proposals before The Bahamas government.

But in a recent release, FPL announced that it was now focusing on other potentially more viable options to meet FPL’s increasing requirements because there appears to be limited opportunity in accessing LNG at this time.

The Tractebel proposal had called for the construction of an LNG terminal in the Freeport Harbour while El Paso planned to build a terminal in East Grand Bahama.  But The Bahamas Environment Science and Technology Commission rejected both sites as being viable locations for the construction of LNG plants.

Government officials later indicated that the consortium was eyeing another site in Grand Bahama for the construction of the terminal.  The plan also entails laying an LNG pipeline from the northern Bahamas to Florida.

In December, El Paso spokesman, Aaron Woods, said that both El Paso and Tractebel will continue their individual efforts on the development side of each pipeline.

But he said, "Ultimately, one pipeline and one LNG facility will be built.  The companies will be participants in the ultimate project that is selected."

Although it had indicated last year that it had formed an arrangement with El Paso and Tractebel, FPL said in its recent release that none of the proposals received as a result of a request for proposals for the long-term supplies of LNG presented "sufficiently compelling reasons for FLP to proceed with its [request for proposals] at this time."

The utility company said in a release, "The lack of benefit to FPL customers and no bidders meeting all the specifications of the [request for proposals] contributed to the decision."

Terry Morrison, vice president of FPL’s energy marketing and trading organization, said in a statement, "We remain interested in LNG, but we have to know our customers will benefit before we will enter into any long-term transaction."

The announcement by FPL appeared to have left some confusion.

Mr. Woods, in an interview with The Bahama Journal from Houston, Texas last Thursday, said as far as El Paso is concerned, its agreement with FPL Group Resources, a subsidiary of FPL Group, Inc., still stands.

"FPL Group Resources, SUEZ (Tractebel) and El Paso Corporation continue to believe that having LNG and re-gasifying it there in The Bahamas providing South Florida with an alternative source of natural gas would be in the best interest of consumers in South Florida," he said.

"Based on the announcement by FPL utility, we are assessing our options and at this time, that’s all the information I have."