AES Wants BEC to Switch to LNG

by Larry Smith

The company that has been seeking approval for the past seven years to build a $650 million liquefied natural gas {LNG} terminal at Ocean Cay near Bimini to supply South Florida power plants has recently upped the ante.

AES Project Manager Aaron Sampson recently said the company was willing to build a pipeline from Ocean Cay to Nassau to supply LNG to the Bahamas Electricity Corporation.

He added that replacing diesel with LNG would save the country over $200 million a year in fuel costs. It would cost an estimated $10 million to convert BEC's Nassau generators to run on natural gas.

The previous Ingraham government gave approval in principle to AES' original proposal to develop a regasification terminal and other facilities at uninhabited Ocean Cay, together with a 40-mile undersea pipeline that would send 842 million cubic feet a day of gas to Florida. The gas would be imported as a liquid from Trinidad in refrigerated ships and turned back into gas at Ocean Cay.

Since then, the government has changed twice and both major parties have maintained a steely ambivalence towards the project, partly due to criticism from environmentalists. The AES offer to supply Nassau with LNG was made in May in what many believe is a last-ditch effort to sweeten the pot.

The growth of the LNG market is currently hampered  by inadequate infrastructure, which is why AES and others have proposed building regasification plants in the Bahamas. There are few locations on the Florida coast that can accommodate such terminals, but during the last several months new LNG terminals have opened in western Mexico, Texas and Louisiana. 
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Florida is the biggest market for natural gas in the US southeast, accounting for about 30 per cent of regional demand. Currently, Florida receives most of its natural gas supply from other US states via pipelines: one running from Texas through the Florida panhandle to Miami, an underwater link from Mississippi and Alabama to central Florida, and a third from the LNG import terminal at Elba Island, Georgia to the Jacksonville area.

Meanwhile, retired Nassau-based shipping consultant Bill Bardelmeier has suggested that AES and the Bahamas government consider using new compressed natural gas (CNG) tankers to move product from Ocean Cay to supply BEC on New Providence.

"In the past couple years there has been a new wave of interest in transporting natural gas under pressure. It won’t be in a  liquid form , but that is immaterial. The objective is  simply to pack a lot of molecules of gas into a small space. for economic transport to the marketplace. A compressed natural gas tanker will simply have in its hull a number of very large cylinders with thick walls that will resemble giant versions of your household cooking gas tank.

"Perhaps rather than build a $200 million 10-inch pipeline across the flats from Ocean Cay and then somehow working around the problems of crossing the Tongue Of The Ocean,  we should look very carefully at using a pair of small CNG tankers. While one larger ship would be more economic we couldn’t risk dependence upon a single vessel.

"Private Bahamian capital can surely very easily do the domestic transport. In turn, that may mean that BEC can negotiate  a better price for buying gas F.O.B  (Free On Board Ship) at Ocean Cay.. CNG deserves a close look in any event."

The government is increasingly concerned at the potential impact of rising fuel costs  on the Bahamian economy. Currently, all electric power in the country is generated by oil-fired plants. A public-private sector energy policy committee has been looking at ways to address energy problems and recently submitted its first report to cabinet.

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[Patty Roker]

I will be having Aaron Samson as my guest this Sunday from 2 to 4 pm on ISLAND 102.9 or www.islandfmonline.com

We are welcoming callers who have questions for him at 356-4509 or 356-4510.