The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

ANNUAL fuel savings of $50m are forecast from a new liquefied natural gas (LNG) facility during its first phase - and rising up to $180m in its fourth phase.

The Davis administration has signed two agreements to facilitate the use of LNG in The Bahamas.

An agreement was signed with New Providence Gas (NPG) a subsidiary of FOCOL Holdings Limited, for development of an LNG regassification terminal development while a supply agreement was signed with Shell North America.  

Prime Minister Philip Davis said the agreement is an integral part of the administration’s energy reform and plans for economic development and the integration of LNG in the energy mix will lower costs and transition the country to using cleaner sources of energy. 

“We see the integration of LNG into our fuel mix as a major step in the right direction as we move away from “dirtier” fossil fuels, such as diesel and oil, significantly lowering our carbon emissions. LNG is also typically cheaper and has less price volatility compared to diesel and oil,” said Mr Davis. 

“Because we are building a new industry, we can also anticipate significant economic impact, including the creation of new jobs. In short, this agreement represents an essential component in our energy reform and economic development plans.”

FOCOL chairman Sir Franklyn Wilson said the agreement is one of the most “significant events to have taken place in an independent Bahamas”. 

He said the transition to LNG will produce cheaper and cleaner energy which can be used to drive more sustainable economic growth.

“This initiative will positively and meaningfully foster greater and sustainable economic growth in a way that dramatically increases opportunity for all,” said Mr Wilson. 

“It will help to expand and deepen the country’s capital markets in ways which will be dramatically important to all and help manifest our commitment to the environment.”

Minister of Energy and Transport JoBeth Coleby-Davis said the first phase, which is set to begin before the end of this year, will have a Shell chartered vessel supply LNG offshore which will be converted to gas once it arrives at the Clifton Pier terminal. 

This natural gas will be used to fuel the two 31-megawatt GE dual-fuel turbine engines supplied by Bahamas Utilities Holdings in the first phase and expand to other natural gas fuelled generators in New Providence.  

“We firmly believe that a brighter energy future for our nation will be secured the agreements we’ll sign today enable the fast adoption of LNG in The Bahamas,” said Mrs Coleby-Davis.

“The first phase will consist of a Shell charted small scale LNG vessel supplying LNG onshore. Once on shore, the LNG will be converted to natural gas at the terminal. During the second half of this year, this gas will first be utilized in the gas turbines currently operated at Clifton Pier. Future phases will expand natural gas delivery to additional gas fired power assets in New Providence.”

Attorney General Ryan Pinder said the addition of LNG to the fuel mix will result in over $180m in annual savings on fuel that will be passed on to the consumer. 

He explained that in the first phase, it is expected that $50m annually in savings will be passed on and by the fourth phase that amount would’ve increased to over $180m in annual savings. 

“Just by phase one, we’re looking at a $50 m annual savings in fuel prices to the consumer. By the time we get to phase four, which will be a robust, hopefully a floating storage unit, but with that still in design, we’re looking upwards of $180 m a year in annual savings to the consumer, just on fuel pass through pricing. So that’s rather significant,” said Mr Pinder. 

“Just imagine the economic opportunities of an extra $180m a year in the economy of Nassau, being able to be reinvested, being able to create additional opportunities, small businesses being able to have extra disposable income to grow. So, the economic impact builds on from the savings that we will see.”