LAST Thursday, a team from the Azurest Cambridge Power consortium, one of the bidders on Jamaica’s critical 360 Megawatt baseload electricity generation project, hosted a media briefing session at the Terra Nova Hotel.
The consortium includes Azurest Partners (a New York-based business strategy/capital raising firm focusing on emerging markets), Cambridge Project Development Corporation (a Florida-based engineering, energy and environmental consultancy focused on the Caribbean with projects in Cayman, Bahamas, and Barbados) and Inergix Corp, a Washington based energy sector-focused project management consultancy.The key to their proposal, argues Azurest Managing Director Ken Allen, is that they have cracked the problem of how to economically deliver LNG to Jamaica from the US by a dramatic 80 per cent reduction in the size of their Liquefied Natural Gas (LNG) delivery ships.The typical LNG delivery ship is 200,000 cubic metres, designed for long trips to, say, Japan, with huge operating costs that make it uneconomical for them to deliver the much smaller cargoes that Jamaica and the rest of the Caribbean require. Azurest Cambridge has partnered with Waller Marine to specially manufacture LNG ships of one-fifth of the size, or approximately 40,000 cubic metres.Waller Marine is also currently building the fourth LNG export terminal to be approved by the US Government (it has already approved three), as the US becomes the Saudi Arabia of natural gas over the next decade due to the enormous success of fracking technology.This would give Jamaican consumers access to the world’s cheapest energy, reducing prices paid by the consumer by at least 30 per cent, as it is expected that US gas will remain at around US$4 per cubic foot as increasing supplies offset the impact of increased exports. This compares with Trinidad with up to three times more expensive gas, currently in a range of around US$9 to US$12 per cubic foot. These prices do not include the impact of getting the gas to Jamaica, which can exceed US$5 to US$7 per cubic foot.As an aside, Allen noted, he sympathised with the problem that the current Government (and indeed the Jamaican governments of the past decade or more) had faced in acquiring competitively priced natural gas. Currently, the international gas marketplace caters almost entirely to the large industrialised countries with enormous appetites for natural gas, and the financial resources to pay for gas from anywhere in the world.A typical LNG facility — where gas is chilled into a liquid state and then placed into ships to transport around the world — is a US$4-billion or more investment. The companies that manage these LNG facilities can only build them if they know there are large and credit-worthy customers for their gas who are willing to commit to long-term gas supply contracts. Typically, the customers willing to pay the highest gas prices have been in Asia. The solution to this problem has only become available in the last couple of years as alternative US supplies have become much more plentiful (the US now has a surplus of gas), and new gas export terminals have been approved (the initial terminals were actually for imports). The missing piece was to reduce the size of everything, not only the ships but including a much smaller LNG terminal at Waller Point.The final innovation is a modular barge floating platform for the power plant, similar to those already in use at Rockfort and Old Harbour. Using a floating versus land-based plant should halve the building/installation time compared with a land-based power point (to about 17 rather than 36 months), allowing Azurest Cambridge the fastest start-up time with the first of three 100 megawatt (MW) barges to be delivered in September 2015, and the rest in three month increments thereafter. The system is completely modular, so further increments of 50 to over 100 MW can be added as electricity demand increases, reducing the lumpiness of these large investments.A key part of the Azurest Cambridge Inergix consortium business model is to offer a meaningful stake in the project to local investors, allowing Jamaicans participation in what is expected to become a Jamaican venture. Initally, Azurest Cambridge expects to raise over US $100 million in core equity capital from mainly US-based investors, with another US$50 million from local Jamaican investors. They already have commitments from three of Jamaica’s 10 largest financial institutions, and would plan to do an initial public offering on the Jamaica Stock Exchange within one to two years of the start-up of the venture.Allen says that the enterprise will also fund a Jamaican non-profit to provide at least US$1.5 million each year in programmes including city beautification, environmental stewardship, conservation and energy efficiency, as well as higher education, including scholarships in business, STEM (science, technology, engineering and mathematics) and international teacher training. In addition, he advises they will partner with The Thought Leadership and Innovation Foundation to help the country with its national development goals, drawing on their global resources, expertise and networks, with goals ranging from helping to establish medical/nursing schools, agribusiness development, and everything in-between.
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Azurest Cambridge says it has fastest, cheapest electricity generation solution
