By NEIL HARTNELL
Tribune Business Editor
POLYMERS International yesterday said it will reap "a return on investment within a year" from becoming the first Bahamian company to import liquefied natural gas (LNG) to run its processes.
Greg Ebelhar, the Freeport-based industrial giant's chief operating officer, expressed hope that others will "jump on board" with a venture designed to provide "significant cost savings" and reduce its environmental footprint by more than 4,000 tonnes of greenhouse gas emissions per year.
He was speaking after Polymers revealed it had signed a multi-year agreement with New Fortress Energy for the latter to supply it with LNG, and replace diesel as the main fuel source for the four boilers that run its processing equipment for heating.
New Fortress, which was the company behind the Christie administration's secretive fuel supply and power plant deal for Bahamas Power & Light (BPL), has supplied cryogenic tanks - each with a capacity of 60,000 gallons - to enable Polymers International to store LNG at its Freeport headquarters.
It will resupply the Grand Bahama-based manufacturer on a weekly basis from its Miami LNG terminal, with Mr Ebelhar telling Tribune Business that Polymers International was acting as a trailblazer on an initiative that could be a "win-win" for all.
Disclosing that Polymers had become frustrated with the wait for Grand Bahama Power Company to embrace cleaner fuels and renewable energies, he added that New Fortress was still looking to develop an LNG terminal in Freeport if there was sufficient demand from the private sector.
"First off, LNG is a cheaper fuel source for us in use in our boilers," Mr Ebelhar said. "We operate on close margins. What we sell is not a big profit margin driver, and any place we can save money we look to do so.
"It gives us an opportunity to reduce our environmental footprint, as diesel fuel is not the cleanest option to burn in boilers. This is critical to industry, having a cheaper fuel source than right now. I'm breaking ground on this, and jumping in first.
"It has not been easy, but we're bringing it in and hopefully will see some others around here jump on board. In the future, New Fortress would like to have a terminal here. All the way around it's a win-win for Grand Bahama."
Mr Elbelhar urged Grand Bahama Power Company and its new 100 per cent owner, Emera, to "look again" at diversifying its fuel sources away from a reliance on fossil fuel and produce cleaner, cheaper power.
The two utilities had previously obtained the necessary federal and state approvals to import LNG to Grand Bahama from West Palm Beach, but the plan was 'mothballed' after energy market economics changed through the reduction in global fuel prices.
With the anticipated savings from switching to LNG no longer available, the GB Power/Emera initiative "fell apart" in Mr Ebelhar's words. He revealed that, had it proceeded, the utility would have run a pipeline extension to Polymers International's headquarters to enable the company to receive a direct supply.
"It just didn't make sense to make the investment to put in the equipment and everything, and try to get a return off the investment," the Polymers chief said of the past.
But, turning to the present, he added: "This is something the power company needs to look at again. When there's a virtual pipeline for LNG coming here [via New Fortress], they might want to look at LNG to generate electricity so the entire island gets lower power rates."
Energy costs are arguably the greatest impediment to the Freeport industrial sector's competitiveness, with prices five-six times higher than rival US rates deterring existing companies from job creating-expansion and new ones from coming.
Mr Ebelhar indicated that the city's existing industrial conglomerates might still challenge GB Power's monopoly if reduced electricity costs are not forthcoming, although he conceded that reliability and performance had improved since Emera took majority control.
"Since Emera first came in we have - the industrial group - been basically rattling our sabres. We need cheaper power or we will be looking at challenging the exclusivity of Grand Bahama Power," he told Tribune Business.
The New Fortress deal merely involves Polymers running its boilers off LNG, not that it will be able to disconnect from the GB Power grid. "We're still one of their largest customers, and the bills are still quite high," Mr Ebelhar confirmed.
He did, though, credit GB Power and Emera with improving supply reliability and stabilising energy prices through their fuel hedging programme.
But, not satisfied, Mr Ebelhar revealed that Polymers International is "researching" the possibility of solar power generating electricity for its manufacturing facility, thereby lowering fuel and energy costs even further.
"There is lots of available land here for solar," he told Tribune Business, adding that a possible solar partnership between GB Power and Polymers - discussed some three years ago - was currently "off the table" after the idea "kind of disappeared".
'In business every day is a battle. You have to kind of take your destiny in your own hands," Mr Ebelhar said. "It's going to be less than a year before we get a return on investment [with LNG].
"I believe that once others see the benefits of this, especially the Power Company, we'll have a lower cost of power here on the island. I'm campaigning for it, and hopefully we'll see it.
"We work on very small margins on anything, and when I can reduce costs by a faction of a cent per product and produce millions a year it adds up. We're in cost reduction mode around here; anywhere we can find ways of doing it."
Mr Ebelhar said Polymers International's boilers had been running off LNG for around a week already, and added that the fuel cost savings would help ensure the company's continued economic viability and sustainability.
"We've been here for 20 years, and plan on being here for another 20 years," he added, describing Polymers International's LNG partnership as "the catalyst" for energy reform and opening "a new chapter in the diversification of energy sources for industrial purposes in the country".
"We're proud to partner with Polymers International to introduce clean, reliable and affordable natural gas to the Bahamas and contribute to Grand Bahama's economy," said Wes Edens, founder and chairman of New Fortress Energy.
"As we've seen with many other markets, the introduction of LNG for power generation and industrial uses can be a catalyst for energy transformation, economic growth and significant environmental gains."