- The main objective of the project is to reduce the price of electricity
- The consortium will finance and conduct a front-end engineering design study (FEED study)
- The harnessing of cost-effective energy solutions are essential to Jamaica’s growth agenda
A development agreement to bring compressed natural gas to the Bogue power station in St. James, was signed on July 22 by the Jamaica Public Service Company (JPS) and a consortium of companies, led by Fueling Tech Incorporated (FTI) International Group Inc., on July 22.
The other members of the consortium are: Virtual Solutions Inc. of Dubai, United Arab Emirates (UAE) and Red Rock Power Partners out of the United States.
The main objective of the project is to reduce the price of electricity to the consumer by providing cheaper fuel to the Bogue plant. Conversion works will be undertaken at the plant in order to receive the gas by December 2015.
Addressing the signing ceremony at the Jamaica Promotions Corporation (JAMPRO) offices in New Kingston, Minister of Industry, Investment and Commerce, Hon. Anthony Hylton, said under the development agreement, the consortium will finance and conduct a front-end engineering design study (FEED study), which will determine the final design of the compressed natural gas delivery infrastructure, along with the price of the gas delivered to JPS turbines. He added that this will be done in six months.
“The cost of the feed study will be borne by the consortium, and JPS has the option to walk away from the agreement if the price of the gas delivered is greater than 10 per cent of the originally proposed price,” he added.
Mr. Hylton encouraged the investors to move with deliberate speed on the FEED study, and re-double their efforts with JPS to make this investment succeed.
The Minister said the supply of compressed natural gas to the Bogue facility will significantly reduce the Jamaica Public Service’s operating costs, and generate anticipated fuel savings of between 15 per cent and 30 per cent on an annual basis.
“As such, JPS cost savings could be in the magnitude of US$40,000,000.00 annually,” he said.
The Minister noted that the identification and harnessing of cost-effective energy solutions are essential to Jamaica’s growth agenda and the achievement of greater levels of production and the expansion of businesses and industries.
For her part, President, Jamaica Public Service Company, Kelly Tomblin, said this is a “first step” in bringing lower energy prices to consumers, adding that fuel diversity is critical in the process.
“We are excited to convert Bogue. We also need new efficient power plants and I would encourage this team of influential people to make sure that we have the plan to get a new efficient power plant,” she said.
Meanwhile, Chief Executive Officer, Virtual Solutions Inc., Frank Rose, informed that the intention is to deliver compressed natural gas in the most cost effective and efficient manner, adding that the project to be undertaken will be the first in the region.
“We are looking forward to get this going and bring this to completion…I am confident that with co-operation, mutual support and common goals, it will be achieved,” he said.
The project proposes to achieve the following: design, build, install and maintain compressed natural gas infrastructure for the JPS Bogue, Montego Bay power plant; install the requisite storage infrastructure to support the facility; train operational personnel and commission facility; source, procure and deliver compressed natural gas to the Bogue Power plant.
Based in Toronto, Canada, FTI has been in the business of designing, manufacturing, supplying and installing compressed natural gas fueling station equipment around the world for over 30 years.
The JPS has been actively pursuing natural gas for the Bogue plant since early 2008. The company has since held discussions and engaged in negotiations with a number of potential gas suppliers, resulting in this agreement.
The gas project at Bogue is part of the JPS’ overall fuel diversification programme, which includes the construction of a 6MW hydroelectric power plant in Maggoty, St. Elizabeth, which is expected to come on line early 2014.