THE TRINIDAD and Tobago Government has offered to finance 50 per cent of the
cost of a feasibility project which is aimed at developing Jamaica's conversion
to the large-scale use of natural gas.
If the project is successful, the twin-island republic will supply Jamaica with liquified natural gas (LNG) at significantly reduced prices, Anthony Hylton, a former Minister of Mining and Energy, turned energy policy adviser, said yesterday.
He made the announcement during a press briefing at the Office of the Prime Minister, Jamaica House.
Hylton said it was important for Jamaica to look at other sources of energy partly because of the volatility of oil prices on the international market. According to him, if current prices hold, Jamaica could be faced with an oil bill of US$800 million for the 2003 calendar year. He warned that "our economy therefore is vulnerable to the continued volatility in oil prices that remain hostage to the international and the Middle East oil politics".
He said the decision by the Trinidad and Tobago Government to foot 50 per cent of the bill was a "prelude to possible equity participation in the project".
"We have already accepted this very meaningful offer," said Hylton, who was appointed special envoy with responsibility for advising the Prime Minister on energy policy, after the October 16 general election in which he lost his St. Thomas Western seat.
He was a member of the Jamaican delegation to the recently-concluded CARICOM Heads of Government conference in Trinidad and Tobago. The conference discussed issues relating to security of energy supplies; and energy pricing policy and its impact on competitiveness within the CARICOM Single Market and Economy (CSME). The conference discussed also the necessity of a Common External Tariff (CET) as it applies to energy products.
Hylton told the press briefing that government had already completed a pre-feasibility study on the LNG project and that three potential sites had been identified for the construction of an import terminal for LNG.
The location of the sites are determined by the sufficiency of land space for the establishment of a gas park (industrial park) which will allow for the erection of new power generation plants close to the source of gas supplies.
According to Hylton, the establishment of a gas park would not only be a catalyst to industrial development in Jamaica, but would also improve the country's energy efficiency considerably, to the levels that developed countries like Japan and South Korea have experienced.
He said discussions with Trinidad and Tobago were far advanced and that both countries had agreed to a different pricing mechanism for Jamaica, within the framework of the CSME.
"This new formula is expected to lead to significant reduction in the price of energy available in Jamaica, especially in the price of electricity," Hylton said. He added that there was a considerable interest in the project from all over the world.
The importation of LNG will initially meet the demand of the power and bauxite/alumina sectors.