The government's plan to introduce liquefied natural gas (LNG) to oil-dependent Jamaica will proceed, despite calls by an independent investigator to halt the tender process for the project, Prime Minister Bruce Golding has said. Golding said in a statement that his Cabinet will review a call by the Jamaican contractor general to redo the government's tender process for the offshore energy project, including a re-gasification terminal and a natural gas transportation system to feed the electricity grid by 2013.
Contractor general Greg Christie said his assessment of a government contract revealed numerous irregularities and financial conflicts of interest that he asserts must result in criminal investigations by prosecutors and police. Golding said diversifying Jamaica's energy sources is too important for the LNG project to be scrapped. Christie's recommendation "does not mean that the LNG project has been cancelled, far from it. It is too important to us, too vital for our economic future, to our investment prospects, our hope for development, and therefore the project is proceeding apace," said Golding, who first made the comments at the start of a call-in radio programme.
Golding's office said the move to introduce natural gas will help ease soaring energy prices in Jamaica.
In a 609-page report, Christie alleged the preferred bidder, Belgium-based shipping group Exmar Marine NV, was privy to information not provided to other bidders, giving it an "irregular, improper and unfair advantage." Citing a slew of email correspondence, Christie said he concluded there was a too-cozy relationship between Exmar executives and Stephen Wedderburn, LNG project coordinator at the Petroleum Corporation of Jamaica, and Ian Moore, a former chairman of the PCJ and principal of Caribbean LNG, a British Virgin Islands-registered company that is part of the Exmar Consortium.
Exmar and Wedderburn did not immediately respond to calls or e-mails for comment. Moore has said that "we have nothing to hide." Christie suggests the men steered the government's energy policy away from coal to liquefied natural gas and then shared valuable pre-bidding information with Exmar, which he said had been lobbying for the introduction of LNG to Jamaica from as early as 2006.
LNG from T&T
In a related story, the Jamaica Gleaner reported that the United States Embassy in Kingston was not convinced that T&T was unable to honour its commitment to supply Jamaica with LNG. Instead, the US believed that the Trinidadian government might have pulled out of the deal because of a desire to ensure its manufacturers maintained a competitive advantage in the region and because it was upset over Jamaica's role in negotiating the PetroCaribe deal with Venezuela. In a March 2007 diplomatic cable, US Embassy officials opined that T&T might have been protecting its domestic firms. "Ostensibly, because of production constraints, T&T reportedly will renege on its promise to supply liquefied natural gas to Jamaica, thus jeopardising a US$1.6-billion expansion of Alcoa's alumina operations in Port Esquivel," the cable said.
The cable noted that Jamaica was one of the highest per-capita consumers of oil among non-oil producing countries in the world and desperately needed the LNG deal. This was intended to significantly improve the competitiveness of local producers while slashing the country's oil import bill which in 2006 stood at US$1.74 billion. "Any extension of concessionary rates would have significant revenue implications for T&T. In addition, T&T firms enjoy significant competitive advantages in the region due to their low electricity costs," the cable said. "Favourable terms for Jamaica would erode these benefits and eventually allow Jamaican firms to replace some of the goods now being imported from T&T, thereby narrowing T&T's US$500-million trade surplus," added the cable.
Jamaica, faced with increasing fuel prices, had approached T&T to purchase LNG over the long-term.
Then Energy Minister Anthony Hylton had commissioned a number of studies, one of which said the introduction of LNG could slash Jamaica's fuel bill by 30 per cent. Following discussions with the PJ Patterson-led government of Jamaica, the government of T&T, led by Patrick Manning, agreed to sell Jamaica LNG at reduced prices. (AP)