The Weekly Brief: Greater Caribbean

[vc_row][vc_column][vc_column_text]

July 12, 2020 edition–US Virgin Islands’ grid; Colombia’s auction terms; and LNG supply.

.

 

Last Week in a Minute or Less

 

Central America. Geothermal will power Guatemala’s gold mining; the Panama Canal expects more LNG transits; and NFE secured Mexico and Nicaragua’s LNG supply.

 

Greater Antilles / Northern Islands. DISE got a share of the Monte Plata Solar power plant; Yaadman goes into Kingston’s market; and the Bahamas’ oil opponents fear new oil licenses.

 

Lesser Antilles / Southern Islands. The Caribbean may reinvent its downstream infrastructure; and Puerto Rico and the US Virgin Islands will fix their grid.

 

South America’s Caribbean Coast. Colombia published oil and gas auction terms; CGX spuds a Guyana well; and Parex and Ecopetrol partnered up in a block.

 

Déjà vu all over again. Last week’s readers were particularly interested in natural gas prices (World Oil – English); LNG demand in South America (Natural Gas intel – English); and the Dominican Republic’s oil exploration rules (Dominican Today – English).

 

 

Government & NGO

 

The IMF visited St. Vincent and the Grenadines… The International Monetary Fund approved St. Vincent and the Grenadines’ request under the Large Natural Disaster Window (LNDW) of the Rapid Credit Facility (RCF) for US$11.6m (IMF – English). The RCF will help cover payment and fiscal needs after the explosive eruption of the La Soufrière volcano.

 

…and the Dominican Republic. The IMF expects a significant recovery from the 2020 economic crisis in 2021 with risks broadly balanced (IMF – English). Growth in the Dominican economy is expected to converge to its potential over the medium term, progressively closing the output gap.

 

Energy generators want to okay power export rules. The Costa Rican Association of Power Generators (ACOPE) urged the government to approve the law allowing private generators to export power to the regional market (PV Magazine – Spanish). ACOPE urged lawmakers to approve a fast-track process to speed up the law’s approval.

 

Bermuda signed up to the global tax system overhaul. The Caribbean nation is among 130 jurisdictions that agreed to the outline of a two-pillar plan to overhaul the global tax system. Bermuda is concerned with the technical and practical aspects of the plan, which include a global minimum tax rate of at least 15% (Royal Gazette – English).

 

Fitch downgraded Colombia’s rating. The international rating agency downgraded Colombia’s rating from BBB- to BB+ (FX Mag – Spanish). The reason is the increase in the fiscal deficit and public debt due to the COVID-19 pandemic fight.

 

 

Oil & Gas Upstream

 

The Bahamas’ oil opponents fear new oil licenses. Oil exploration opponents believe the Cabinet Minister’s statement on outstanding fees “leaves the door open” for license renewals if the sums are paid (Tribune 242 – English). The minister said the government will not consider the Challenger Energy Group’s application for exploration license renewals until the fees are paid.

 

Colombia published oil and gas auction terms. According to the regulator ANH, oil and gas operators will have six years to complete exploration programs for blocks awarded in the Ronda Colombia 2021 auction (BN Americas – English). Production contracts of 24 years will then be awarded to operators who declare commercial viability of any discoveries.

 

Patterson-UTI bought Pioneer Energy Services, moving into Colombia. Patterson-UTI agreed to buy Pioneer Energy Services for US$295m, offering the purchaser a new Colombia footprint (Platts – English). Most of Pioneer Energy’s drilling rigs, 16 of 17, fall into the “super-spec,” or premium category.

 

Parex and Ecopetrol partnered up in a block. Parex expanded its strategic partnership with Ecopetrol to earn an operated, 50% interest in two blocks, the Arauca and LLA-38 blocks (Globe News Wire – English). The Blocks are situated approximately 40 kilometers north of Parex’s operated, Capachos producing block.

 

CGX spuds a well in Guyana. CGX Energy drilled its first well in the South American country, the Kawa-1 well, on the shallow-water Corentyn block with the Maersk Discoverer drillship in a project that will end on December 15 (Argus Media – English).

 

 

Liquid Fuels Mid-Downstream

 

Yaadman goes into Kingston’s market. The gas station brand is adding another gas station to its holdings, its first in Kingston and the second to operate under the brand (Jamaica Gleaner – English). Yaadman leased lands from the Jamaica Railway Corporation near the Kingston waterfront.

 

Venezuela produced two upgraded crude grades for refining. The state-owned company started producing two upgraded crude grades for domestic refining to boost fuel supply in the country (Reuters – English). The lack of investment and US sanctions have led to scarcity of cooking gas, gasoline, and diesel.

 

Venezuela’s oil exports went up through Malaysia. Venezuela’s oil exports were boosted by cargoes to Asia and expanded sales of upgraded crude (Reuters – English). Traders last month raced to discharge in China record imports of Venezuelan crude masked as Malaysian bitumen blends ahead of a June 12 tax.

 

The Caribbean may reinvent its downstream infrastructure. Some Caribbean countries are turning to storage tanks, offshore logistics, and LNG to try to monetize the aging assets and languishing brownfield sites, while others hope to revive conventional refining (Argus Media – English). The Jamaican refinery is currently processing around 23,500 b/d of imported crude and Cuba is processing 65,000 b/d.

 

 

Natural Gas Mid-Downstream & LNG

 

The Panama Canal expects more LNG transits. The Panama Canal Authority is studying the high number of arrivals of LNG ships during the first weeks of July, following a surge in transits during the final week of June (Platts – English). Congestion between the US Gulf Coast and East Asia has been a persistent challenge.

 

NFE secured Mexico and Nicaragua’s LNG supply. New Fortress Energy reached an agreement for LNG supply that will cover gas volumes through the end of 2027. Commercial operations are expected to begin in days in Mexico and next month in Nicaragua, and the company will offer a reliable supply of cleaner energy (Business Wire – English).

 

A resort in the Bahamas turns to LNG for funds. A Bimini resort said its private power generation was financed by LNG supplier New Fortress Energy. The cost is being recovered via an added component to the purchase price of the LNG supply (Tribune 242 – English).

 

 

Shameless Self-Promotion

 

The graphic below highlights the unitized nature of ISO LNG imports. Barbados first imported ISO containers in increments of 744,000 cubic feet of natural gas (9,000 gallons of LNG) each. Since 2018, the region’s ISO imports have used tanks with 848,000 cubic feet of natural gas (10,260 gallons of LNG) capacity.

 

Barbados tends to import 4-6 containers at a time (but received 9 at once early last year), the Bahamas takes 1-5 containers per shipment, and Haiti brings in 2-4 most of the time. The graphic is from a presentation given by Energy Narrative’s Managing Director, Jed Bailey, at the Platts Central American and Caribbean Energy Conference.

 

Electric Power & Renewables

 

The Dominican Republic will subsidize the electricity deficit, fuels, and flour. The supplementary budget proposal that the Dominican Republic gave to the National Congress for its analysis and approval contemplates spending RD$15.3bn to subsidize the power deficit, fuels, and flour (Dominican Today – English).

 

La Esmeralda milk company powered up with solar. ESSI-Copower installed a solar park of 669kWp for Lácteos La Esmeralda, enjoying a 36% cut in its power bill (PV Magazine – Spanish). The self-supply system was designed to cut fixed costs.

 

Colombia awarded a BESS project to Canadian Solar. The national mining and energy planning unit UPME closed the tender process for a 45MW battery energy storage system (BESS), awarding the project to the Colombian affiliate of Canadian Solar Inc (Renewables Now – English).

 

Geothermal will power Guatemala’s gold mining. Bluestone Resources announced plans to open a gold mine, undertaking additional work on the Mita Geothermal project (Think GeoEnergy – English). An updated reservoir calculation was completed that estimated a reserve capacity of over 20MW.

 

Puerto Rico and the US Virgin Islands will fix their grid. The US Department of Housing and Urban Development offered US$1.93bn in electrical grid funding to help the electrical system of Puerto Rico and the US Virgin Islands become more resistant to storms and climate change (New Energy Events – English).

 

DISE got a share of the Monte Plata Solar power plant. Deetken Impact Sustainable Energy (DISE) signed an agreement for the acquisition of the Monte Plata solar power plant in the Dominican Republic (New Energy Events – English). DISE will participate through its two renewable energy Funds, H-REFF and CABEF.

 

 

Old School Social Goes Viral

 

(Editor’s note: For the duration of the COVID-19 outbreak, this section will refocus on announcements of event delays or cancellations, events that are moved online, and scheduled webinars and public conference calls. Stay safe!)

 

 

The 8th Geothermal Congress for Latin America and the Caribbean will be held on September 8-10.

 

 

Lateral Thinking

 

Is Jamaica ready for electric vehicles? The Office of Utilities Regulation (OUR) noted the trends and promises of electric vehicles to ensure that the local power sector takes advantage of emerging opportunities (Jamaica Observer – English). Jamaica had approximately 536,000 ICE motor cars registered in 2018, whereas only 10 EVs are registered.

 

 

Quote of the Week

 

“Escribo para reivindicar nuestro derecho a la tragedia.”

 

“I write to reclaim our right to tragedy.”

 

 

– Eduardo Lalo (1960), Puerto Rican novelist, who won the Romulo Gallegos Prize.

 

 

 

We hope you have a productive week. Please send any news, comments, or EV development to CaribbeanWeekly@energynarrative.com.

 

Tell your friends and colleagues about the Weekly Brief! They can sign up for a free one-month trial here.[/vc_column_text][/vc_column][/vc_row]