Presupuesto de Protocolo

The delivery of the Interim Report permitted a developer of “mid-scale” LNG facilities and services to become aware of this Study. Mid-scale refers to systems designed for about 100,000 to 1,000,000 tonnes of LNG per year throughput, enough to serve power generation of 100 to 1,000 MW. The developer approached Nexant and provided information on their approach, which is tailored to the smaller markets that exist on many of the Study islands. The systems relevant to this Study would include a mid-scale carrier of 4,000 – 50,000 cubic meters, much smaller than the large tankers in the 135,000 to 250,000 cubic meter size discussed in the previous subsection. Storage and regasification facilities would be scaled from 5,000 to 80,000 cubic meters (about two to four weeks average gas send out) for the specific demands of each customer. The devloper indicates that its “right-sized” systems compensate for the loss of economies of scale with larger carriers and other facilities.

The developer provided cost data that can be used to compare with the transportation costs of other fuels. To make a consistent comparison, we adjusted their numbers to include the on-shore gas distribution facilities we assumed were needed to move gas to different power plants, as we had done for the other gas options. We then calculated the costs per GJ for each location. The resulting values indicated that, following the same procedures as previously, the mid-scale LNG option could produce the lowest cost fuel / generation technology combination for five locations. Table 7-6 shows the locations, the mid-scale LNG price, the previous lowest cost fuel, and the previous lowest cost fuel price. The fuel prices are levelized values over the period 2014-2028. On the three smaller islands, coal priced at 12.31 $/GJ is lower in price than mid-scale LNG, but the higher equipment cost and higher heat rates make the cost of power generation slightly higher for the coal-based technology than mid-scale LNG. On the two larger islands, mid-scale LNG price is about 10-20% lower than the large-scale LNG price.

Table 7-6 Mid-scale LNG Comparison Antigua and Barbuda Grenada St. Vincent & Grenadines Haiti Jamaica North Mid-scale LNG Price, $/GJ 19.42 17.25 18.40 10.73 9.82 Generation Technology 10 MW MSD 10 MW MSD 10 MW MSD _{20 MW} LSD 20 MW LSD

Previous Fuels Distillate,

coal Distillate, coal Distillate, coal LNG LNG Previous Fuel Price, $/GJ 22.45, 12.31 22.45, 12.31 22.45, 12.31 12.73 10.90 Generation Technology 10 MW MSD, 10 MW CFB 10 MW MSD, 10 MW CFB 10 MW MSD, 10 MW CFB 20 MW LSD 20 MW LSD

Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy – Final Report 7-18 The developer indicates that it plans to provide the LNG infrastructure as a service. The

customer defines the scope of service, and the developer provides design, financing, fabrication, commissioning and operation of equipment to meet service scope. The arrangements would provide contractual certainty with respect to cost of service and operations. Contract length would be 15 – 25 years with fixed quarterly payments commencing at start of operations and escalating at reference inflation index. Payment would be based on pre-agreed availability and performance criteria. The customer will be responsible for gas procurement.

Mid-scale, or as other developers refer to it, small-scale LNG systems have been developed in Norway, where the current market is 120,000 tonnes per year. One developer’s 300,000 tonnes per year liquefaction plant is due to become operational in 2010 in Stavanger, Norway.

Analysis

The main advantages of mid-scale LNG are the following:

 Similar advantages to the larger scale LNG facilities discussed in the previous subsection.

 Based on the cost figures provided by the developer, mid-scale LNG could provide the most economically attractive option in some locations, especially for islands with smaller demand.

 The technology involves smaller versions of more commonly used large facilities with proven track records

 The developer proposes to finance the infrastructure facilities and offer the services on a fixed price basis

The main disadvantages of mid-scale LNG are the following:

 Some similar disadvantages to the larger scale LNG facilities discussed in the previous subsection, though to a lesser degree: not applicable to the smallest islands,

environmental issues, public perception of safety, cost of mooring in hurricane susceptible locations

 Because the technology is smaller in scale than the commonly used equipment, Nexant was unable to verify or suggest revisions to the cost information presented

 Several factors may lead to increased costs:

 Most LNG loading facilities are used by much larger carriers and may be

unwilling to reserve space for the smaller mid-scale carriers on a regular basis. It may be necessary to develop separate docking facilities, with associated costs, to serve the smaller carriers. No costs for separate docking facilities are included.  The costs for the current mid-scale LNG system include minimal (one to two

weeks) storage. Additional storage will increase the LNG unit price.

 If demand increases rapidly the initial LNG carriers may have to be replaced with larger vessels, or larger vessels purchased initially.

 Vessels will be purpose built for these markets, each having to be designed for the specific application. The large scale LNG analysis was based on chartering

existing LNG vessels and using existing retired large vessels to convert to Floating Storage and Regasification Units (FSRU).

Our preliminary analysis indicates that mid-size LNG could be a viable fuel option for some islands, justifying a more detailed analysis.