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."

The Bahamas Trade and Industry Minister, Leslie Miller says that The Government may Very Well Approve All Three Proposals to Lay Liquefied Natural Gas (LNG) Pipelines between The Bahamas and Florida

Minister Leslie Miller said he is "absolutely" satisfied that all of the environmental concerns raised regarding the proposed LNG projects have been addressed

Bahamas Gov't Closing Pipeline Deal

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

08/03/2004

Environmentalists fighting three projects to lay liquefied natural gas pipelines between The Bahamas and Florida appear to be losing that battle, with Trade and Industry Minister Leslie Miller saying Sunday that the government may very well approve all three proposals.

Minister Miller told the Bahama Journal that the AES Corporation continues to lead the race for The Bahamas Government's approval for its project, with a heads of agreement nearly finalized.

Two other companies - Tractebel and El Paso - are also moving close to convincing authorities to give them the go-ahead, the Minister said.

Minister Miller said he is "absolutely" satisfied that all of the environmental concerns raised regarding these projects have been addressed.

He also said that international professionals have already determined that the projects would pose no significant threat to the environment.

But it was recently reported in the Florida press that Tractebel, a Belgian company, was facing fines from the Florida Department of Environmental Protection for scraping, crushing or dislodging 29 corals while taking samples of the ocean in preparation for its LNG project.

Minister Miller said Minister of Health and Environment Dr. Marcus Bethel and officials at the Bahamas Environment Science and Technology Commission [BEST] have been working hard to address environmental issues raised in relation to the three proposals before the government.

But BEST Commission Chairman Keod Smith continues to be against approving any LNG project in The Bahamas, saying that the legislative framework is not yet in place.

Minister Miller on Sunday pointed out that the benefits that such projects would bring to the Bahamian people would be significant.

For each project, Minister Miller said, the government would get between $5 million and $10 million for the initial license.

In year one of any of one of the projects, the government would get $10.8 million in various fees; in year five, that figures is expected to double; in year 10, it is expected to increase to $30 million; and by year 15, the government should be getting $40 million to $50 million from a company operating an LNG facility in The Bahamas, Minister Miller said.

Meanwhile, the AES Corporation has secured a partnership with Repsol, Europe's fifth-biggest oil company, to supply liquefied natural gas for what is says will be a $700 million project.

The companies expect to officially announce the deal shortly, according to AES Project Director Aaron Samson.

Minister Miller told the Bahama Journal that the arrangement between AES and Repsol strengthens the LNG proposal.

No company produces the LNG as well as sells it, Minister Miller explained.

Mr. Samson said Friday that while the approval is preventing his company from moving forward, he is satisfied that AES will soon get the necessary permits.

When asked whether the new partnership with Repsol was an indication that AES was facing financial instability, Mr. Samson said that was certainly not the case.

"We're not a producer of LNG," he explained.  "We never purported to be a producer of LNG.  We never pretended that we'd be doing this thing alone."

Mr. Samson said the partnership with Repsol will not impact the proposal before the government in any way and that relevant government authorities have already been informed about this development.

He said Repsol would transport the LNG via ships from Trinidad to the AES site at Ocean Cay, near Bimini.  The LNG would then be turned to the gaseous form and sent through a pipeline to South Florida.

While AES awaits final approval, it continues to carry out "environmental remediation" at Ocean Cay, Mr. Samson said.

The AES pipeline, which would run from Ocean Cay, would deliver natural gas to markets in Florida, as would the other two pipelines being proposed.

AES Corp. Clears Hurdle For LNG Pipeline

By Candia Dames

Nassau, Bahamas

candiadames@hotmail.com

23/01/2004

The AES Corporation has cleared another important hurdle in its bid to lay a liquefied natural gas pipeline between The Bahamas and southeastern Florida.

 

The U.S. Federal Regulatory Commission on Thursday gave the company final approval for its Ocean Express pipeline project, Reuters News Service reported.

 

Now AES has to secure the go-ahead from the Bahamas Government before it could begin the project.

 

But that could take some time.

 

Two months ago, Keod Smith, Ambassador to the Environment and Chairman of the Bahamas Environment Science and Technology Commission (BEST), urged the government to move "very slowly" before making a decision regarding the three proposals for LNG projects before it.

 

Mr. Smith said that the necessary legislation is not in place to guard against possible environmental impacts.

 

His comments came after the BEST Commission viewed the environmental impact assessment for the proposed AES project.

 

That assessment said that laying a liquefied natural gas pipeline from Ocean Cay, near Bimini, to Florida presents the greatest potential for impact to marine resources, as it will cause temporary disturbance to the ocean floor.

 

But the EIA also said that the $550 million project is not expected to impact critical habitats of any endangered or at risk species.

 

The report said the development of a LNG gas terminal and desalination plant on Ocean Cay would provide economic and social benefits to Bimini and the Bahamian government as well as providing a much needed additional supply of natural gas to South Florida and potable water and natural gas to Bimini.

 

The 54-mile pipeline would transport up to 842 million cubic feet of natural gas a day. The pipeline would connect with the Florida Gas Transmission Co. pipeline system in Broward County, Florida.

 

The Ocean Express pipeline would connect with, and receive natural gas transported by a 40-mile Bahamian-jurisdiction pipeline, which is owned by another AES affiliate, that extends to Ocean Cay.

 

Ocean Cay, a 90-acre man-made industrial island, would be the site of a liquefied natural gas storage and re-gasification facility that would receive LNG from foreign suppliers.

 

The AES pipeline would deliver natural gas to markets in Florida and over the interstate pipeline grid to other parts of the country. AES has said it plans to have the pipeline start delivering gas to customers by November 2005.

 

AES Project Director Aaron Samson has said that The Bahamas is the single best place in the world to bring LNG into southeast Florida and has continuously promised that his company is adhering to the strictest environmental standards.

 

Two other companies, El Paso and Tractebel North America Inc. also propose to establish liquefied natural gas pipelines between The Bahamas and Florida.

 

But Trade and Industry Minister Leslie Miller has said that it appears that El Paso is out of the race given that it has been reporting financial troubles.