NASSAU, Bahamas, CMC -The Bahamas government has signed an agreement to embrace cleaner energy and develop the country’s first liquified natural gas ( LNG) terminal. Prime Minister Phillip Davis said the first phase of the project will begin before the end of this year.
“We see the integration of LNG into our fuel mix as a major step in the right direction as we move away from “dirtier” fossil fuels, such as diesel and oil, significantly lowering our carbon emissions. LNG is also typically cheaper and has less price volatility compared to diesel and oil,’ Davis told the signing ceremony.
“Because we are building a new industry, we can anticipate significant economic impact, including creating new jobs. In short, this agreement represents an essential component in our energy reform and economic development plans,” he added.
But the main opposition, the Free National Movement (FNM), has raised concern over the government’s deal with Shell and the Freeport Oil Company Limited (FOCOL), which was formed in 1967 by the Grand Bahama Port Authority Limited (GBPA) for the development of the LNG terminal.
The agreement for the development of the terminal and other facilities is a partnership between FOCOL Ltd. and Shell, while the LNG supply agreement is with Shell alone.
“This deal is far removed from the arrangement that was under consideration by the previous FNM administration, which contemplated a deal solely between Shell and the government, a deal in which the jetty and regasification terminal would have been owned and operated by a public entity for the benefit of the Bahamian people,” FNM leader, Michael Pintard said.
He said that while pretending that this is the same deal that brokered with the then FNM government, the Davis administration has instead devised a brand-new arrangement.
“This administration has brought in a third party – FOCOL – without going through the required transparent bidding process. Where was the legally required transparent bidding process to bring on a private operator?
“Why is FOCOL being handed a multi-year, multi-million-dollar lucrative arrangements outside of the provisions of the Public Procurement Act that requires contracts like this to be put out to tender?” he added.
However, Davis told the ceremony that the agreement to establish the LNG terminal is “another meaningful step forward in our journey toward a cleaner, more stable, and more affordable energy future for The Bahamas.”
He said when his administration first announced its plans to tackle energy reform head-on, to some people, “it may have sounded like we were aiming too high, dreaming too big, or maybe casting our vision too far. I don’t blame them”,
Davis said that the cost of electricity had been so high for so long that many people accepted it as a part of daily life in The Bahamas, and added to that were the decades of constant failures of Bahamas Power and Light Company Ltd’s (BPL) main generators, the inefficiency of the Wartsila engines and other failed would-be solutions.
“We had an aging and deteriorating power grid, a complete lack of renewable energy, and a power company over half a billion dollars in debt. There was no lack of obstacles standing in the way of our energy reform ambitions. ”
Davis said that energy reform loomed large as an excellent opportunity for change. It is the most potent policy intervention to provide relief and lower costs for households and businesses.
He said the reforms began with the equity rate reduction and that the adjustment results show that in January, 58,000 households had electricity bills below US$125.
He said the government also announced plans to solarize the islands of the Bahamas and that several Bahamian companies are driving the process.
At the signing ceremony, FOCOL chairman Sir Franklyn Wilson said that the deal was one of the most important things that had happened to the country in a long time. Wilson said introducing LNG will mean cheaper and more reliable energy for the country.
“This initiative will positively and meaningfully foster greater and sustainable economic growth in a way that dramatically increases opportunity for all,” he said, adding it will help expand and deepen the country’s capital markets in ways that will be crucial to all.
He said it would also “help manifest our commitment to the environment. It reflects a vibrancy to our democracy in general and the principle of continuity of government, regardless of the party providing that government”.
Shell representatives did not speak at the signing ceremony.
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