Tuesday, August 11, 2020
By YOURI KEMP
Tribune Business Reporter
The government’s political opponents yesterday argued there was “no surprise” that Bahamas Power & Light’s (BPL) multi-fuel power plant deal with Shell had seemingly run into difficulty.
Philip Davis, the Progressive Liberal Party’s (PLP) leader, responding to Tribune Business’ report suggesting that Shell was losing patience over the pace of negotiations, said: “I am not surprised that this deal between BPL and Shell has run into trouble. We predicted the problems.
“We could not understand how the Wartsila generation deal inter-related with the Shell deal. The plan for reliable power seemed like no plan at all. The government has simply not been transparent and with less than two years left to go in their term, they have run out of time to fix it.”
BPL invested some $95m in acquiring seven new generation turbines from Wartsila, in addition to building infrastructure at Clifton Pier to house them. These engines are ultimately supposed to be incorporated into the multi-fuel power plant that Shell will take majority ownership of under the proposed deal with BPL.
However, signs that the long-running negotiations are not progressing as planned emerged at the weekend when Shell released an opinion piece written by its lead negotiator, Markus Hector, Shell LNG marketing and trading’s general manager for market development, to the Bahamian media for publication.
The article, which contained little that was not already known in terms of details on the proposed power plant, indicated that Shell appears to be becoming frustrated and losing patience over the inability to conclude negotiations that kicked-off after it signed a Memorandum of Understanding (MoU) with BPL in December 2018 having previously been selected as the preferred bidder.
“Our ability to invest in the construction of an affordable liquefied natural gas (LNG) terminal, and our purchase of the new power plants, remains dependent on the timely closure of current negotiations with BPL and the government,” Mr Hector wrote.
“As currently designed using industry standards, this project will produce the majority of power generation for the entire island of New Providence for decades to come. It will be made up of two joint ventures – the ‘Terminal Company’ to operate the LNG terminal, receiving, storing, and re-gasifying the LNG, and the ‘Power Company’ to generate electricity, which will be sold to BPL for transmission and distribution.
A chamber director wants to see what the Bahamas Power & Light (BPL) strategic plan is for the next five years and wants a “long hard look” at the Shell North America arrangement with the power company.
Debbie Deal, head of the Bahamas Chamber of Commerce and Employer’s Confederation’s energy and environment division, told Tribune Business that the proposed deal with Shell North America required a “long, hard look” as she called for BPL to deliver a five-year strategic plan.
“I would like to see what BPL’s strategic plan is for at least the next five years, assuming the government doesn’t change, and to see if encouraging the Shell North America deal to go through will help the Bahamian people and be less of a burden on the government purse,” she said.
“To-date the Shell deal has not benefited the Bahamian people nor the government as it was to be a contract, all-inclusive, no funds except a fuel purchase agreement which was for 25 years I believe.”
Ms Deal continued: “This timeframe will cripple the country as we have seen that our foreign reserves, around half of it is for buying fossil fuels. We need to reduce that by at least half through the use of less energy by all Bahamians and businesses, plus our 30 percent commitment to alternative energy by 2030 as agreed in our signing of the Paris agreement in 2016.
“I think a long, hard look at the long-range impact of any deal that commits the country to one company/entity for 25 years is needed. We have seen in the last year how unforeseen things can change our direction in a heartbeat. Maybe a higher power is speaking to us and we need to listen.”