It’s just a matter of logistics.
That was how Minister in the Office of the Prime Minister with responsibility for Energy Senator Darcy Boyce has sought to explain Barbados’ decision to purchase Liquefied Natural Gas (LNG) from the United States instead of its Caribbean Community (CARICOM) neighbour Trinidad and Tobago.
Boyce said Barbados did not bypass Port of Spain, but simply needed “very, very small quantities” to top up the reserves, which Trinidad was “not able to supply us” at the time.
The Government Senator told Barbados TODAY the administration imported the small quantities of LNG over the past few months because it wanted to avoid a repeat of the shortage of gas experienced during the 2014/2015 tourist winter season.
“We bought a small amount of LNG so we can make sure we have the averages we had last winter. And it is very small amount. It is not a big commercial plant. It is a very small amount to top up, to make sure the plant is okay, to make sure we have the energy we had for the winter last year. So that is all it is,” said Boyce.
“We were not importing any natural gas before. Remember the Prime Minister made a Parliamentary statement sometime last year that we were going to do what we had to do to make sure we did not have the outages again. And so we did a very small plant to make sure we can maintain the pressure in the systems throughout the winter season and the peak of the hotel season. That is all it is.”
In what was a winter of discontent for some tourism stakeholders, several hoteliers and restaurant operators complained of low gas pressure last season.
And in early 2015 Prime Minister Freundel Stuart announced in Parliament that the National Petroleum Corporation (NPC) had discovered that the production of some wells had fallen below the economic threshold, and that two other wells were identified that would be connected to the Barbados National Oil Company Limited’s (BNOCL) existing gas-gathering system.
Stuart had also outlined a plan to address the situation, which included the importation of gas and the retrofitting of the gas plant.
Reports surfaced earlier this week that Barbados had become the first Caribbean island to begin importing LNG from the United States.
The US Department of Energy’s Office of Fossil Energy issued a report saying the prices paid by Barbados were, in some cases, more than double the amount the US was paying for Trinidad exports.
The report said that six shipments of domestically-produced US LNG left the port of Hialeah, Florida between February 5th and April 29th, 2016, bound for Barbados.
“The shipments totalled 7.4 million cubic feet of LNG that fetched prices as high as US$15.78 [per] MMBtu, with the lowest price being US$10 [per] MMBtu.
“In comparison, the highest price Trinidad and Tobago has fetched for LNG exports to the United States this year, was US$6.70 [per] MMBtu.”
However, economist Jeremy Stephen has dismissed suggestions that the island could have sourced the commodity from Trinidad in order to obtain a cheaper price, explaining that it was likely that Port of Spain was not able to provide the quantities the island needed because they were simply too small.
In addition, Stephen dismissed the notion that the move did not look good for relations between the two countries, saying Trinidad did not have the infrastructure to ship small quantities of the product to Barbados each month at a sustainable rate.
“All of those things have to be considered. Trinidad sells the majority of its LNG to the United States because they have the facilities to do so, and the States have the facility to actually send smaller ships to Barbados. Trinidad doesn’t have those ships from what I understand,” Stephen said.
“And apparently for the year so far or at least for the first six months of the year, Trinidad was apparently the only country that was able to export LNG to the United States, which means that they sent huge amount of what they do produce to the United States.
“It is seven million [cubic feet] that Barbados imported over a three-month period versus billions that Trinidad exported to the US for the first [four months] of the year. The arguments make no sense,” he added.