Jamaica, Trinidad and Tobago to negotiate LNG sale

Aug. 12, 2004
After a lengthy spat over the price of LNG, Jamaica's government has entered into formal negotiations with Trinidad and Tobago to supply LNG to Jamaica.

Curtis Williams
OGJ Correspondent

PORT OF SPAIN, Aug. 12 -- After a lengthy spat over the price of LNG, Jamaica's government has entered into formal negotiations with Trinidad and Tobago to supply LNG to Jamaica.

Anthony Hilton, special adviser to Jamaican Prime Minister P.J. Patterson, said the negotiations would not preclude Jamaica's trying to force Atlantic LNG to sell LNG to Jamaica at a "Caribbean price."

The two Caribbean nations have long been at loggerheads over the price, with Trinidad and Tobago contending that Jamaica must pay the Henry Hub price, while Jamaica argued that, as both are members of the Caribbean Single Market and Economy, Atlantic LNG must sell Jamaica LNG at the same price as gas sold in Trinidad and Tobago with only shipping charges added. Jamaica then turned to Qatar as a possible supplier (OGJ, Aug. 25, 2003, p. 46).

But Hilton said Jamaica now would negotiate privately with Trinidad and Tobago, "out of the public glare."

Hilton assured Trinidad and Tobago that Jamaica had the capacity to support a world scale LNG regasification plant, and that skeptics who suggested Jamaica might not have the energy demand to support an LNG regasification terminal were "absolutely incorrect."

"Demand is greater than we had initially anticipated, because of developments in the bauxite industry," he told Oil & Gas Journal. "We can now say that the entire industry is willing to convert to natural gas, and in so doing we estimate that the demand will be 1.5-2 million tonnes/year."

Hilton said the estimates were based on present demand and did not take into account the projected growth in energy use in Jamaica. He pointed out that, unlike neighboring Dominican Republic, which has regasification facilities but has had difficulties financing its LNG commitments, Jamaica's potential natural gas users were reliable and required greater volumes of gas.

"Jamaica has a smaller population than the Dominican Republic but our gas use will be greater than theirs," Hilton explained. He said Jamaica and Trinidad and Tobago have already appointed technical teams to look into the financial and technical aspects of the project.

Hilton said that, while it is the stated policy of Trinidad and Tobago to invest in all aspects of the LNG value chain, the twin island nation had not raised with Jamaica the issue of investing in the terminal.

Hilton added; "We are committed to this regas facility coming on stream by 2007, and we intend to bring it to fruition."