AES still waiting for govt approval
AES still waiting for govt approval
By TAMARA McKENZIE, Assistant News Editor
tamara@nasguard.com
AES Corporation has been steeped in negotiations for the past six years with both the Progressive Liberal Party and the Free National Movement governments, in its quest to build a liquefied natural gas facility in The Bahamas.
To date, there has been no definite approval given to the company, and only approval in principle has been granted. At this point, the FNM says LNG is not a priority, leaving the Virginia-based company in an uneasy position. And while the company has already invested $65 million to meet the necessary approvals, it could still face waiting another year, or two, before an LNG facility becomes a realistic venture
AES, however, remains optimistic.
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“These projects are never easy,” said AES’ Director Aaron Samson in an exclusive interview with The Nassau Guardian on Monday from Virginia. “There are not many of these facilities in the world, so they are not understood and there is a lot of misinformation. [LNG] is a big and new type of industry for The Bahamas and so a certain amount of delay is understandable, and from the amount of time the new government has had to look at it, we are not in a position to complain yet. We did not expect for a new government to come in and make this the first thing that got managed, but we are hopeful that we can get their attention.”
Samson said he is aware that the FNM government is still absorbing a number of projects, but noted that AES is hopeful that LNG is on the government’s agenda and some positive decision is given within the coming months.
“We were quite advanced with the prior [PLP] government, only waiting on the final regulations, and our understanding is that this process is still underway. Hopefully it will be done shortly [but] the only thing left to do at this point is for the government to finalize the regulations and move forward with the project.”
AES Corporation is the only company which has remained in the race to construct an LNG facility in The Bahamas, managing to topple two other energy companies since negotiations initially began with the FNM government in 2001. The company wants to construct an LNG pipeline from the man-made Ocean Cay in Bimini to Dania Beach, Florida. It also proposes to construct a terminal to receive liquefied natural gas via ocean tankers, store the liquid gas, re-convert it to natural gas through warming and send it to the United States via a 94-mile pipeline. The efforts of AES, however, have been stifled because of a lack of regulations to effectively govern the industry, coupled with the concerns of local environmentalists who have ensured that their objection to the facility rings loud and clear.
The company has so far met with the approval of The Bahamas, Environmental, Science and Technology Commission, and only needs the issuance of regulations that would govern the LNG industry in The Bahamas, if made a reality.
Months before vacating office earlier this year, former Prime Minister Perry Christie announced that his government had reviewed draft regulations, but to date, such regulations have not been approved and presented to AES. But the AES Director said he is not concerned about the long wait to receive approval, noting that the process is never a short one.
“The concept of getting an LNG project through the government in under three or four years is not very much the case in any country, let alone a country that has never done one before,” Samson explained. He added, however, that AES is still “hoping and expecting” that the six-year-wait would have been shorter.
“We have invested a lot of money and met the requirements that the government has asked of us, we have met the conditions of the agreement in principle and hope to move forward.”
Echoing earlier comments made by Prime Minister Hubert Ingraham shortly after the FNM took office earlier this May, Minister of State for Public Works, Phenton Neymour, said LNG is still “not a priority” for the government, even though the AES director maintained that there is no other site to build an LNG facility other than The Bahamas. The Florida shoreline, he said, was just too densely populated.
Meanwhile, Neymour, who opted not to give a definite date of when approval would be given to AES, told The Guardian that it is now important to ensure that adequate legislation is in place, coupled with the resources to manage the stewardship of such a facility.
“We are working on the legislation and I have had meetings on LNG since being appointed. We are proceeding with it, but we are proceeding with it cautiously,” he said.
Asked if an LNG facility would in fact become a reality in The Bahamas, Neymour said the country is seeking other sources of energy, and LNG could be a potential source and a viable alternative in The Bahamas. He added that the implementation of such a facility would also increase revenue.
If granted approval, AES’ operations would pump some $20 million in direct revenue to the government, growing to a total of up to $1 billion over the 25-year life of the project, according to Samson. The company is also expected to undertake environmental and training projects, and will permanently hire some 35-40 individuals at the facility. Fifteen people will be hired to assist with tech support and 450 individuals will be hired during the nearly three-year construction period.
Among those countries with LNG regassification facilities are the United States, Trinidad, the Dominican Republic, Brazil, Bolivia, Chile, Indonesia, Qatar and Australia.