Ross Sheil, Staff Reporter

A graphic design of a SeaNG compressed natural gas ship, as depicted on the company's brochure.

A Canadian firm in alliance with Raymond Chang has entered into talks with the Jamaican government to supply compressed natural gas (CNG).

Sea Natural Gas Management Corporation (SeaNG) is also promising that it can deliver natural gas at half the price estimated under the planned US$400 million LNG facility to be built at Port Esquivel in St. Catherine.

SeaNG vice-president Ian Mallory said his company could deliver at reduced price by sourcing from Trinidad, Venezuela and Colombia.

Cost savings

Speaking at the Geological Society of Jamaica Earth Sciences event at the University of the West Indies (UWI) Mona on Wednesday, Mallory said that cost savings could be made from the greater density, which results from compressing the gas for transportation. The process, he said, also eliminates the need for regassifying the product.

"This solution, because the onshore operations are not as large, can be a turnkey solution to deliver to the doors of customers so Jamaica would not have to finance any of it," he said at a meeting of geologists Wednesday on the Mona campus of the University of the West Indies.

The SeaNG solution may also eliminate plans for the alternative US$50 million floating LNG platform at Port Esquivel. A SeaNG ship costs US$35 million to construct.

Energy officials have been in discussion with the LNG division of Norwegian shipping company, Leif Hoegh & Company to provide the platform. But for now Jamaica is reviewing all proposals from potential suppliers, and is holding off on decisions, energy advisor to the Prime Minister Dr. Cezley Sampson told the Financial Gleaner.

A hypothetical joint venture with the Jamaica Public Service Company and the nearby Windalco alumina plant would achieve economies of scales that could be replicated elsewhere, said Mallory.

Offloading

These facilities would consist of room to dock the ship and discharge through port-side pipelines. CNG can also be offloaded at offshore facilities. After a ship has discharged its load it would then be replaced by another ship, operating within a shuttle system.

Such relatively localised delivery systems serving large-scale industrial plants sited along Jamaica's coastlines would eliminate the need to pipe or road transport by tanker over long distances from Port Esquivel.

Delivering by its patented Coselle System, SeaNG's first ships have now been approved by United States shipping classification society, the American Bureau of Shipping, almost 10 years after it issued preliminary approval in 1997.

The first ship, possibly to be built in South Korea, should be launched in 2009, said Mallory.

Pipelines

Each coselle consists of 16 kilometres of 168mm (six-inch) diameter pipelines coiled into a carousel, with capacity for 90,000 cubic metres of CNG. SeaNG has designed ships with capacities from 16 to 144 Coselles.

Chang, a Jamaican/Canadian billionaire investor, who accompanied Mr. Mallory on his visit, confirmed a previous Gleaner report that he is considering financing SeaNG's proposition to supply Jamaica with natural gas.

"LNG is only economical if you have economies of scale but what happens to smaller markets like Jamaica and are shorter distances which is 1,500 miles to Trinidad and half that to Colombia?" asked Chang.

Jamaica's only supply agreement so far is with Trinidad for 1.2 billion tonnes of LNG per year although the viability of that country's reserves has been cast into doubt after wells which were recently sunk turned out to be dry.

Jamaica has also been in dialogue with Ecopetrol, the Colombian state-owned oil and gas company, which is offering only CNG.

Mallory said that his company was also in talks with those three supplying countries.

SeaNG is also in discussion with another Caribbean country interested in CNG supplies, Mallory said.

ross.sheil@gleanerjm.com