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AES Corporation Pushes For Liquefied Natural Gas (LNG) Regasification Plant At Ocean Cay In The Bahamas
Related to country: Bahamas

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AES Pushing For Deal:
By QUINCY PARKER -
Nassau, Bahamas:



AES Corporation remains committed to pursuit of its proposal to construct a liquefied natural gas (LNG) regasification plant at Ocean Cay in The Bahamas, and has pledged to pay $1 million on the day the agreement is signed with the government.

The company has committed to pay $4 million upon the execution of the seabed lease, and $4 million more 12 months thereafter.

AES proposes – as direct benefits to The Bahamas of allowing the plant to built on man-made Ocean Cay – to pay $150,000 to a marine research institute selected by the government within 12 months after the construction of the LNG storage facility begins.

The company forecasts seabed lease fees of about $6 million annually, and also expects to pay about $5 million in work permit fees for about 300 work permits over the three years it is expected to take to construct the facility.

And the company suggests that the government could collect as much as $40 million a year in import duties and stamp tax on natural gas sold to BEC.

AES has also offered to build a 120-mile pipeline from its proposed LNG plant at Ocean Cay to Clifton Pier to deliver natural gas to the Bahamas Electricity Corporation (BEC), at a cost of $120 million to $150 million, to be borne by the company.

And, the company has committed to sell BEC natural gas at the New York Mercantile Exchange (NYMEX) Henry hub price for natural gas, plus import duties and stamp tax plus $3 delivered to Clifton Pier.

The NYMEX-Henry hub price for natural gas on July 2, 2008 was $13.45 per MMBtu, as compared to crude oil, which was posted at $24.78 per MMBtu. [Natural gas is measured in British Thermal Units (BTU) – an energy measure – and MMBtu refers to a million BTUs.]

In exchange, AES wants the government to grant a 15-year LNG exclusive in The Bahamas to the Ocean Cay project.

LNG In The

Bahamas


The Ingraham Administration approved LNG in principle during its second term in office (1997 – 2002), but was voted out of office before going any further.

The Christie Administration which followed sought to create regulations to govern an LNG industry in The Bahamas.

"We went further," Mr. Christie said in 2005.

"We asked for the minister responsible, who had done extensive work on it, to prepare all of the regulations so that when we move forward we have in place to present to the people of the Commonwealth of The Bahamas, not just a decision of the Government of The Bahamas for LNG, but the circumstances in which LNG would exist."

Then-Minister of Energy and the Environment Dr. Marcus Bethel assured the Journal on a number of occasions before leaving office that work on those regulations had progressed, and AES spokesman Aaron Sampson confirmed for the Journal on Wednesday that AES had reviewed and commented on draft LNG regulations.

Virginia-based AES is one of three companies that had proposed to build LNG plants in The Bahamas. Suez Energy North America is the combination of the other two companies (formerly Suez and Tractabel) that had applied to the government, but after months of inaction from the Bahamas government on its application for a liquefied natural gas (LNG) import terminal in Freeport, Suez changed its strategy in 2006, and filed an application for another U.S. LNG terminal offshore Florida.

Lawsuit

The government of the Dominican Republic last year sued AES for more than $80 million in damages, after two years of attempts to get AES to remove more than 57,000 tons of rock ash dumped on beaches in the D.R. between late 2003 and early 2004.

The complaint was a tale of alleged corruption and bribery, and read like pulp fiction in some places, and a horror story in others.

Shell companies, corrupt officials, attempted car fire-bombings and threats of murder and both successfully and unsuccessfully attempted bribery all figure into the lawsuit, filed on behalf of the Dominican government by the law offices of Dr. Bart Fisher.

There were seven counts in the complaint, ranging from "Violation of Racketeer Influenced and Corrupt Organizations Act" (RICO) and "Civil Conspiracy to violate the laws prohibiting bribery and regulating waste disposal" to "claim under the Alien Tort Statute" – under this last claim, the Dominican government said:

"(The) Defendants act as modern-day pirates – roaming the seas in the Caribbean with barges full of waste trying to bribe or intimidate officials from poor Caribbean nations into placing their own citizens at risk by accepting the waste. Such conduct is reprehensible and must be stopped."

The Dominican Republic later settled with AES, less than a week before the case was scheduled for trial in U.S. District Court in Alexandria, Virginia. Terms of the settlement were not immediately disclosed.

The company is still awaiting final approval from the government on the AES Ocean Cay proposal.


July 7, 2008

July 8, 2008 | 6:36 PM Comments  0 comments

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