Bahamas Government Closing Pipeline Deal

Bahamas Gov't Closing Pipeline Deal


08/03/2004



Environmentalists fighting three projects to lay liquefied natural gas pipelines between The Bahamas and Florida appear to be losing that battle, with Trade and Industry Minister Leslie Miller saying Sunday that the government may very well approve all three proposals.

 

Minister Miller told the Bahama Journal that the AES Corporation continues to lead the race for The Bahamas Government's approval for its project, with a heads of agreement nearly finalized.

 

Two other companies - Tractebel and El Paso - are also moving close to convincing authorities to give them the go-ahead, the Minister said.

 

Minister Miller said he is "absolutely" satisfied that all of the environmental concerns raised regarding these projects have been addressed.

 

He also said that international professionals have already determined that the projects would pose no significant threat to the environment.

 

But it was recently reported in the Florida press that Tractebel, a Belgian company, was facing fines from the Florida Department of Environmental Protection for scraping, crushing or dislodging 29 corals while taking samples of the ocean in preparation for its LNG project.

 

Minister Miller said Minister of Health and Environment Dr. Marcus Bethel and officials at the Bahamas Environment Science and Technology Commission [BEST] have been working hard to address environmental issues raised in relation to the three proposals before the government.

 

But BEST Commission Chairman Keod Smith continues to be against approving any LNG project in The Bahamas, saying that the legislative framework is not yet in place.

Minister Miller on Sunday pointed out that the benefits that such projects would bring to the Bahamian people would be significant.

 

For each project, Minister Miller said, the government would get between $5 million and $10 million for the initial license.

 

In year one of any of one of the projects, the government would get $10.8 million in various fees; in year five, that figures is expected to double; in year 10, it is expected to increase to $30 million; and by year 15, the government should be getting $40 million to $50 million from a company operating an LNG facility in The Bahamas, Minister Miller said.

 

Meanwhile, the AES Corporation has secured a partnership with Repsol, Europe's fifth-biggest oil company, to supply liquefied natural gas for what is says will be a $700 million project.

 

The companies expect to officially announce the deal shortly, according to AES Project Director Aaron Samson.

 

Minister Miller told the Bahama Journal that the arrangement between AES and Repsol strengthens the LNG proposal.

 

No company produces the LNG as well as sells it, Minister Miller explained. 

 

Mr. Samson said Friday that while the approval is preventing his company from moving forward, he is satisfied that AES will soon get the necessary permits.

 

When asked whether the new partnership with Repsol was an indication that AES was facing financial instability, Mr. Samson said that was certainly not the case.

 

"We're not a producer of LNG," he explained. "We never purported to be a producer of LNG. We never pretended that we'd be doing this thing alone."

 

Mr. Samson said the partnership with Repsol will not impact the proposal before the government in any way and that relevant government authorities have already been informed about this development.

 

He said Repsol would transport the LNG via ships from Trinidad to the AES site at Ocean Cay, near Bimini. The LNG would then be turned to the gaseous form and sent through a pipeline to South Florida.

 

While AES awaits final approval, it continues to carry out "environmental remediation" at Ocean Cay, Mr. Samson said.

 

The AES pipeline, which would run from Ocean Cay, would deliver natural gas to markets in Florida, as would the other two pipelines being proposed.

 

 

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