Utility Co. Pulls Out Of LNG Plan

Utility Co. Pulls Out Of LNG Plan




By Candia Dames


Nassau, Bahamas

6th June 2005





Florida Power & Light Company (FPL), which was involved in a partnership with two energy firms to construct a liquefied natural gas terminal in The Bahamas, has announced that it has temporarily put on hold a plan to seal a deal for long-term supplies of LNG.


The announcement has placed the fate of one of the LNG proposals for The Bahamas on an even more uncertain path.


FPL had hoped to carry out an arrangement with El Paso Corp. and Tractebel Electricity & Gas whereby through their partnership, natural gas would have been liquefied, shipped from the source and then re-gasified for delivery to Florida.


Last December, the utility company announced that it had agreed to combine development efforts and resources with the two energy companies "in order to bring a new supply of natural gas to South Florida."


Under that plan, the three companies had planned to carryout one project. Prior to that, Tractebel and El Paso had been pushing separate LNG proposals before The Bahamas government.


But in a recent release, FPL announced that it was now focusing on other potentially more viable options to meet FPLís increasing requirements because there appears to be limited opportunity in accessing LNG at this time.


The Tractebel proposal had called for the construction of an LNG terminal in the Freeport Harbour while El Paso planned to build a terminal in East Grand Bahama. But The Bahamas Environment Science and Technology Commission rejected both sites as being viable locations for the construction of LNG plants.


Government officials later indicated that the consortium was eyeing another site in Grand Bahama for the construction of the terminal. The plan also entails laying an LNG pipeline from the northern Bahamas to Florida.


In December, El Paso spokesman, Aaron Woods, said that both El Paso and Tractebel will continue their individual efforts on the development side of each pipeline.


But he said, "Ultimately, one pipeline and one LNG facility will be built. The companies will be participants in the ultimate project that is selected."


Although it had indicated last year that it had formed an arrangement with El Paso and Tractebel, FPL said in its recent release that none of the proposals received as a result of a request for proposals for the long-term supplies of LNG presented "sufficiently compelling reasons for FLP to proceed with its [request for proposals] at this time."


The utility company said in a release, "The lack of benefit to FPL customers and no bidders meeting all the specifications of the [request for proposals] contributed to the decision."


Terry Morrison, vice president of FPLís energy marketing and trading organization, said in a statement, "We remain interested in LNG, but we have to know our customers will benefit before we will enter into any long-term transaction."


The announcement by FPL appeared to have left some confusion.


Mr. Woods, in an interview with The Bahama Journal from Houston, Texas last Thursday, said as far as El Paso is concerned, its agreement with FPL Group Resources, a subsidiary of FPL Group, Inc., still stands.


"FPL Group Resources, SUEZ (Tractebel) and El Paso Corporation continue to believe that having LNG and re-gasifying it there in The Bahamas providing South Florida with an alternative source of natural gas would be in the best interest of consumers in South Florida," he said.


"Based on the announcement by FPL utility, we are assessing our options and at this time, thatís all the information I have."



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