By NEIL HARTNELL
Tribune Business Editor
THE Nassau Container Port's (NCP) operator and its partners yesterday pledged to "ramp up" their Liquefied Natural Gas (LNG) bunkering project, arguing: "The Bahamas must win the race."
Michael Maura, chief executive for BISX-listed Arawak Port Development Company (APD), told Tribune Business that the Bahamas needs to "get out ahead" of rival Caribbean ports that are also chasing what he described as "a win-win-win" opportunity for investors and workers alike.
With Shell confirmed as the winning bidder for the Bahamas Power & Light (BPL) generation contract (see other article Page 1B), APD and its fuel supplier partner, New Fortress Energy, served notice of their intention to refocus on "pursuing" a project that will also boost Nassau's competitiveness as a cruise port.
As cruise ships increasingly turn to LNG as their primary fuel sources, Mr Maura and New Fortress executives explained that the bunkering facility would primarily serve vessels docked at Prince George Wharf and provide numerous other spin-off benefits for the Bahamas.
Besides diversifying APD's revenue streams and increasing shareholder value for the company's 11,000 investors, Mr Maura said the addition of LNG bunkering would also help to lower port tariffs and cargo handling costs - thereby reducing the cost of imported goods for all Bahamians. And, with less than half an acre required for the facility, the APD chief said it has "the potential to generate more profits than any other part of the Port on a per square foot basis".
Mr Maura emphasised the strong synergies between the LNG bunkering project, which features Bahamian investment advisory firm, CFAL, as the third member of the group, and the Government's ambitions to upgrade and expand Prince George Wharf to improve the visitor experience for cruise passengers.
APD is also interested in the latter project, having teamed with Global Port Holdings on a potential bid, and Mr Maura warned that Nassau's cruise port would struggle to accommodate the ever-larger cruise ships coming on to the market without rapid renovation.
With the Government's search for a new BPL generation partner seemingly "behind us", the APD chief executive said the trio would now seek the necessary government approvals and permits for their LNG bunkering facility in earnest.
"We would like to be able to ramp up the review of this bunkering opportunity," Mr Maura told Tribune Business. "We have communicated with the Ministry of Environment, Ministry of Tourism and Ministry of Transport, and we will begin the process of working with these ministries to move the project forward.
"We want to ensure the Bahamas wins the race. This is a Bahamian opportunity, and we want to make sure the Bahamas wins the race and gets out ahead of competitors looking to build LNG bunkering terminals as I speak."
The opportunity has been created by the 100 new cruise ships set to sail out of shipbuilders' yards within the next five years, combined with International Maritime Organisation (IMO) directives that will impose limits on ship emissions from 2020.
The latter is driving the cruise ship industry to use LNG as its main fuel, with 20 per cent of 'new builds' expected to use this source. And, of the 100 vessels in the industry 'pipeline', around one-third - some 30 - are destined for the Bahamas and Caribbean.
Mr Maura yesterday urged the Government and private sector to move swiftly before the 'window of opportunity' closes, adding: "We all need to roll up our sleeves and get to work."
Jake Suski, a New Fortress spokesperson, declined to put a dollar value on the group's likely investment in an LNG bunkering facility if it receives the go-ahead. While around "a dozen jobs" were expected to be created initially, he added: "As demand for LNG grows, and there comes opportunities to increase deliveries to customers in the Bahamas, we expect a significant gain in jobs for Bahamians."
New Fortress is already supplying Freeport-based Polymers International with LNG to fuel its main steam boilers, and the fuel supplier is seeking to further develop a Bahamian corporate client base once it begins moving the product through Nassau Container Port.
Both Mr Maura and Mr Suski, apart from pointing to LNG's benefits as a clean, efficient fuel source, emphasised that their plans posed no health and safety threat - as some, including former PLP chairman, Bradley Roberts.
The bunkering facility will be "self-contained", with no pipeline running from Arawak Cay to other parts of Nassau. Most of the LNG will be stored in a "small vessel" berthed at the Nassau Container Port, with the partners planning to use a specially-constructed barge to transport LNG to refuelling cruise ships at Prince George Wharf.
Mr Maura said such an operation will mirror what happens at the Port of Miami and Port Everglades, and he added: "The technology today is much different than it was 20 years ago. These things are built very safely, very competently.
"The vessel we're using is smaller than a cargo ship. It brings in LNG, will come alongside our bulkhead, and we will have a facility on the port proper. Most of the storage of the LNG will be on the small vessel. We're talking state-of-the-art technology. We're not looking to invest in purchasing barges that are 20 years-old.
"The total volume of LNG at Prince George Wharf in the cruise ships will be greater than the volume of LNG at Nassau Container Port."
Mr Maura added that LNG was far more stable and safe than the gasoline being transported around New Providence's streets at any moment by 20 tankers. He added that should a tank rupture, the fuel would merely disperse into the atmosphere.
New Fortress's Mr Suski added that it was "one of the safest, if not the safest, fuels to move around the world". He added that New Fortress, founded by Milwaukee Bucks owner, Wes Edens, had significant experience in handling LNG and ship-to-ship and ship-to-shore transfers as a result of its investments in Jamaica and deal with the Jamaica Public Service (JPS) Company.
With the LNG facility set to take up "less than half an acre" of the Arawak Cay port's 57 acres, Mr Maura told Tribune Business: "It's very small but it's impactful.
"On a per square foot basis, it has the potential to generate more profit than any other part of the port." He added that LNG bunkering offered other potential spin-offs, including cold storage for agriculture and fisheries products.
"Should we have LNG and convert it back into natural gas, that creates energy and we will have the ability to use that to provide cold storage for agriculture and fisheries," Mr Maura said. "This investment at Nassau Container Port provides an opportunity to expand our agriculture and fisheries sectors.
"We look at this as expanding investment opportunities and employment opportunities for Bahamians. We recognise that for a new industry like LNG bunkering there must be broad-based opportunities for Bahamians to participate. That's in jobs, but also investment and return on that investment."
With APD's internal rate of return (IRR) capped at 10 per cent, Mr Maura said it was looking to new business opportunities and revenue streams as a means to lower port tariffs and reduce the cost of living and business costs for the wider economy.
"The diversification and moving away from pure cargo means there's greater security for our shareholders, when today they experience the ebb and flow of the economy and cargo throughputs," he added.
"The more diversified we can be as a port operating company, the less impact to our shareholders when we experience a drop in cargo throughput. By pursuing LNG, by pursuing Prince George Wharf, this makes for a stronger port company."
Mr Maura told Tribune Business that the LNG bunkering project "aligns" with the Government's ambitions to overhaul Nassau's, and the Bahamas', major cruise port.
He explained that most of the 100 cruise ship 'new builds' were of Royal Caribbean's Oasis 'class' variety, carrying almost 9,000 people between passengers and crew, yet only Prince George Wharf's northern-most bulkhead was suitable to accommodate them.
"There's additional development and renovation required to accommodate these larger vessels," Mr Maura told Tribune Business. "We need to do it now as competitors with other Caribbean ports are chasing the same opportunity.
"These two projects align and run parallel to each other. We need to develop our bunkering capacity at the same time as we develop our cruise port infrastructure."
Mr Suski added that the Bahamas was "uniquely positioned to capture the Caribbean market" as the region and North America caught up with Europe in providing LNG bunkering for cruise ships.