Minister of Public Works Desmond Bannister yesterday confirmed that a portion of Bahamas Power and Light’s (BPL) rate reduction bond will be used to pay for Shell’s liquefied natural gas (LNG) plant.
“I want you to understand this,” Bannister told The Nassau Guardian in the foyer of the House of the Assembly.
“There’s a difference between a generation facility and a regasification plant. A regasification plant is the place where they’re going to get the gas in and the creation of the LNG and all that. So, it has nothing to do with what I said about Wartsila.
“What I said about Wartsila relates to a generation facility. Next to every generation facility, there’s a regasification facilit[y].”
Last November, BPL signed a memorandum of understanding (MOU) with Shell Gas and Power Development B.V.
The MOU established Shell as the project developer for the power project, which will include the development of marine infrastructure to receive liquefied natural gas; a gas pipeline to bring gas to shore; onshore LNG regasification terminal and a new gas-fire 220-plus megawatt power plant.
At the time, it was said that Shell, which would become an independent power producer (IPP), would cover the cost of constructing the plant, which was reportedly expected to be upwards of $100 million. BPL will in turn pay Shell to supply electricity.
It is unclear if that still stands.
Yesterday, when reached for a comment on the matter, BPL Chairman Dr. Donovan Moxey said, “I cannot get into the details of that because we are still in the quiet period regarding our ratings for the bond. So, I can’t say anything concerning to the bond.”
The first mention of the rate reduction bond being used for the Shell plant came on December 9.
On Monday, while explaining the government’s intended usage of the funds from the bond, Attorney General Carl Bethel said, “So, when that is all done, those funds will repay the government some of its expenditure.
“Those funds will assist in terms of the bond in addressing transmission, distribution, etc. and the bringing on of the Shell liquefied natural gas plant.”
The Electricity Rate Reduction Bond Bill, 2019, aims to establish a legislative framework for BPL to raise $650 million through a rate reduction bond.
According to Bannister, $321.1 million of the funds raised will be used to refinance BPL’s debt, $28 million for solar installations on the Family Islands, $70 million for the expansion of the Wartsila plant at Clifton Pier, $15 million to convert Family Island generation facilities to liquefied natural gas, $15 million for fiberglass cooling pipe replacement, $30 million for an advanced metering infrastructure project and $6 million for system reinforcement and customer connections.
He also said that $48.1 million will be used for 132-kilovolt transmission and substation upgrades, $34.9 million for line upgrades and extensions, $24.7 million for other substation upgrades and $14.3 million for 34.5-kilovolt line upgrades.
Yesterday, when pressed on how much would go toward the plant, Bannister, asked, “You saw what I had in my speech in Parliament?”
He continued, “You also saw me say that we are going to make determinations about the whole bond and where everything goes.
“And I indicated that we might not even need $650 million, so it depends. It depends on a lot of things. As soon as we have every detail, you’ll be the first to get it.”