Caribbean Dream - Successes and Setbacks in Shifting the Islands from Oil to Gas

For several years now, power generators and other major energy users in the Caribbean have been working to shift from diesel or fuel oil to alternative fuels — mostly natural gas delivered by ship as liquefied natural gas (LNG), but also propane. A few significant projects have advanced, and new infrastructure to receive LNG and propane has been put in place to support additional fuel imports into the region. But other projects have been delayed or even scrapped because of financial or regulatory troubles. Today we update the laid-back region’s efforts to wean itself off diesel- and fuel-oil-fired power.

The islands and Central American countries whose shores are lapped by the waves of the Caribbean Sea are known best for their white-sand beaches, aqua-colored water and umbrella drinks, but they also have a surprising amount of energy infrastructure — and significant energy needs. As we said in A Pirate Looks at Storage, the Caribbean has nine operating crude oil storage facilities that represent a working alternative to onshore storage in the U.S.  In Down to Kokomo, we considered the growing interest in selling U.S.-sourced compressed natural gas (CNG) to the region, and in Feeling Hot, Hot, Hot, we looked at existing and planned use of LNG to run Caribbean power plants.

A lot has been happening — and, in some cases, not happening — since we last examined efforts by the power and industrial sectors in Caribbean/Central America to move beyond diesel and fuel oil (the old reliables). For example, last year Jamaica Public Service Co. completed the conversion of its 120-megawatt (MW) Bogue power plant in Montego Bay (green dot in Figure 1) to allow it to be fueled by natural gas from imported LNG, and just last month (April 2017), the Jamaica utility broke ground on its new, 190-MW Old Harbour power plant (red dot), which will be fueled by gas from LNG as well. The Old Harbour plant is scheduled to come online in the second half of 2019. New Fortress Energy, an LNG marketer, is under contract to provide LNG for both plants.

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