It may be a world-renowned holiday destination but the Bahamas is now making moves in the LNG sector as it seeks a move away from diesel.
On 20 March, Bahamas LNG Partner, a wholly-owned subsidiary of the Bahamas government, signed agreements for the importation and regasification of LNG. It will be used to replace the archipelago’s dependence on diesel fuel in power plants. A terminal deal has been struck with local supplier Freeport Oil Company Ltd and Dutch energy giant Shell, with the latter to supply LNG, according to local media.
This strategic shift aligns with a government goal to provide cleaner, and more affordable energy with lower environmental impact. Currently oil is responsible for nearly all its power generation in the country.
In a related but separate transaction, The Bahamas Power and Light Company (BPL) and the government have entered into a power purchase agreement (PPA) and a transmission interconnection agreement with Energy Bahamas Holdings, a company that will own the power plants powered by the imported LNG.
Law firm Hogan Lovells represented the government on the PPA transaction. The firm is also advising on over a dozen PPAs for microgrid projects located on New Providence and the Family Islands. The solar and LNG projects all have the same aim of greening and diversifying energy supply.
“These agreements represent a pivotal step in transforming the Bahamas’ energy landscape,” said Hogan Lovells partner Dave Locascio. “The introduction of LNG and solar energy will provide more sustainable, affordable power for the citizens of The Bahamas.”
The Bahamas aims to reduce its greenhouse gas emissions by 30% by 2030, relative to a business-as-usual trajectory and conditional on the provision of international support, according to the International Energy Agency.
Cryogenic technology solutions provider INOX India won a contract last November to develop a mini LNG receiving and regasification terminal in the Bahamas.
