US regulator brings curtain down on LNG expansion in troubled Puerto Rico energy sector
The Federal Energy Regulatory Commission has issued an order formerly ending the proposed expansion of liquefied natural gas import facilities in the US territory of Puerto Rico in the Caribbean amid continued problems in the utility sector.
“Aguirre Offshore GasPort requests that FERC vacate its 2015 order authorizing the construction and operation of LNG import terminal facilities along the southern shore of the Commonwealth of Puerto Rico near the municipality of Salinas,” said the FERC.
“In its request to vacate, Aguirre stated that it no longer intends to proceed with the project, that no construction has been undertaken, and that no facilities are in service,” added the regulator.
The Aguirre project company filed its last status report in June 2018 to the FERC to keep its permit process up to date, though then informed the regulator in November that the venture was not proceeding.
The FERC notice pulls the curtain down for now on plans for LNG expansion in Puerto Rico.
Excelerate Energy, the US specialist in LNG terminals, had previously agreed to provide a floating storage and regasification unit for the Aguirre project in 2019, though was forced to cancel its contract with the bankrupt Puerto Rico Electric Power Authority.
The FSRU was to have been deployed offshore Salinas and would also have had a 6.4 kilometres pipeline to provide regasified LNG to the Aguirre power station.
Puerto Rico’s existing EcoElectrica onshore LNG regasification facility at the town of Penuelas is located about 35 miles east of the Aguirre power plant.
Analysts note that Puerto Rico’s power sector has been struggling because of financial problems, exacerbated by Hurricanes Irma and Maria in 2017.
The situation has presented challenges for developing new LNG and energy infrastructure, complicated by the poor credit record of the local power authorities and questions over its suitability as a counterparty for any LNG-to-power projects.
A US legal report on Puerto Rico said that in the absence of legal reforms, the energy and LNG sectors appear unlikely to grow in the near future.
“Puerto Rico needs well-designed legal reforms to address the problems with its power sector, before it is likely to see growth in its LNG industry,” said the report.
