Bahamas Power and Light (BPL) and Shell North America hope to have their definitive agreements completed by March of this year, BPL Chairman Dr. Donovan Moxey said yesterday.
Moxey, who was a speaker at yesterday’s Bahamas Business Outlook (BBO) at Baha Mar, also explained that Bahamians will be able to invest in the company that will be created when the deal with Shell is signed, called Power Co.
Shell’s General Manager of Market Development Markus Hector, who spoke to reporters outside of the BBO, explained that Shell and BPL have worked hard and spent millions to bring this project – which will be a 20-year deal – to a conclusion.
“We are progressing extremely well, we have had very good meetings this week with BPL, as well as other agencies with the project.”
Shell and BPL signed a memorandum of understanding to formalize the negotiation process in November 2018. According to Moxey, both entities are close to completing the details of the power purchase agreement and the asset purchase agreement.
When all is said and done, Shell will purchase the majority stake in Power Co. – which will include BPL’s stations A and D at BPL’s Clifton power station – and own the majority share of Terminal Co., a liquefied natural gas (LNG) terminal that will be built at Clifton Pier near BPL’s power plant.
“We have, in the meantime, made significant progress in getting our licenses progressed with the Bahamas Investment Authority, the environmental impact assessments done, getting the land acquired that we need and we are at an advanced stage of negotiating together the terms of this agreement,” Hector said.
“As Donovan said in his speech, it is a 20-year-plus agreement and it is very important for us to get it right for both parties because it is something new for The Bahamas and for us it is a really fantastic opportunity to be involved in this LNG, to natural gas, to power delivery value chain.
“We are in a great partnership. We are in a very advanced stage. We have made some good progress on this. As a technical developer, we have spent millions of dollars over the past year and a half to get this project progressed and we’re very proud to be a partner of The Bahamas, here to get a cleaner and very reliable fuel and power system up and running for the future.”
Moxey said Shell and BPL are already talking to a local investment house on a possible initial public offering for both Terminal Co. and Power Co.
Hector added that Shell wants to have heavy Bahamian participation in its operations when it begins.
“The way that we run our business, we want to have strong local participation, that’s how we basically run our business across the globe,” he said.
“We want to develop this as a power complex with a power plant and LNG terminal in the best possible way for The Bahamas and we want to basically get local investment in to both of these entities as soon as possible.
“We’re committed to developing local people and employing local talent in the operation of these plants.”