Hawaii Gas Solicits Bids For Bulk Supply Of Liquefied Natural Gas (LNG)
HONOLULU – Hawaii Gas is seeking proposals for the supply of liquefied natural gas (LNG) in bulk to support the delivery of natural gas to existing and prospective consumers in the state of Hawai‘i, and the provision of an LNG Floating Storage and Regasification Unit (FSRU) and associated services to receive, store and regasify the LNG for distribution. Hawaii Gas has invited LNG suppliers worldwide to submit proposals.
The company has been working with key stakeholders on developing a comprehensive LNG plan for the state, given the potential for LNG to diversify Hawai‘i’s fuel supplies to reduce the state’s dependence on foreign oil and help lower Hawai‘i’s high cost of energy. Using natural gas as a fuel for power generation complements the intermittency of solar and wind to create the lowest-carbon and lowest-cost solution for Hawai‘i available today, and will further demonstrate the state’s leadership role in clean energy. Hawaii Gas’ plan will address the statewide demand for natural gas for residential, commercial, institutional/industrial, power generation, and ground and marine transportation uses.
“The high cost of energy is harming Hawai‘i's economic future, but there are steps we can take now to reduce costs and increase our energy security,” said Alicia Moy, president & CEO, Hawaii Gas. “Hawaii Gas is committed to swiftly and responsibly exploring and securing a bulk supply of LNG at the lowest possible cost to benefit all energy users on all islands and for all industries throughout Hawai‘i. We believe a bulk LNG solution will provide substantial savings while serving as a transitional fuel as Hawai‘i moves away from oil to renewable resources.”
Joseph Boivin, Jr., senior vice president of Business Development & Corporate Affairs, Hawaii Gas, said, “We have carefully studied the demand and supply sides of the equation and have determined that bulk LNG supply and delivery solutions are technically and financially feasible for Hawai‘i and could be put in place by late 2018 or early 2019.” He added, “LNG is the ideal versatile low-cost and low-carbon emission fuel that supports traditional direct uses of natural gas for heating, cooling, cooking and lighting, as well as power generation and transportation. The supply agreements that we are seeking will be flexible to accommodate changes in LNG demand over time as Hawai‘i’s energy efficiency and renewable energy use increase. The plan will leverage our existing infrastructure as the state’s only regulated gas utility.”
Hawaii Gas has asked prospective bidders to submit proposals for two levels of LNG demand: a minimum of 300,000 MTPA (metric tonnes per annum) equivalent and 1 million MTPA equivalent, the latter of which approximates Hawai‛i’s aggregate annual LNG supply requirement. At both demand levels, mechanisms are defined by the ITB that will accommodate changing demand profiles due to increased use of renewable energy.
The deadline for submission of bids is Feb. 16, 2015. Hawaii Gas anticipates working quickly with key stakeholders after evaluation of the submissions to determine the proposal that is the most cost-effective and flexible for the state.
On Oct. 19, 2014, the company filed an application with the PUC to further diversify the fuel supply for its O‘ahu utility pipeline customers by converting up to 30 percent of the synthetic natural gas (SNG) production at its SNG plant in Kapolei to LNG. The filing limits the amount of LNG to a volume of approximately two containers per day, depending on demand.
In April 2014, Hawaii Gas became the first company to bring liquefied natural gas to the state, having received PUC approval to import LNG in containers for use as a backup fuel for its SNG operations.
About Hawaii Gas
Hawaii Gas is the only government-franchised, full-service gas company manufacturing and distributing gas in Hawai‘i. The company’s market includes Hawai‘i’s approximately 1.4 million residents and nearly 8 million visitors. Hawaii Gas manufactures synthetic natural gas, or SNG, for its utility customers on O‘ahu, and distributes liquefied petroleum gas, or LPG (propane), to utility, tank and bottled gas customers throughout the state’s six primary islands. Hawaii Gas is the first company to bring liquefied natural gas, or LNG, to Hawai‘i. It uses LNG as a backup fuel for its SNG distribution system. Hawaii Gas is a wholly owned indirect subsidiary of Macquarie Infrastructure Company. For additional information, please visit www.hawaiigas.com.