U.S. island states and territories may soon be able to diversify their petroleum-based energy sources to by importing LNG due to relatively low natural gas prices and new shipping technology, according to the U.S. Energy Information Administration (EIA).
The state of Hawaii and the territories of Guam, the Northern Mariana Islands and American Samoa in the Pacific and Puerto Rico and the U.S. Virgin Islands in the Caribbean have traditionally depended on imported petroleum products for their electricity needs, according to the EIA. Relatively high crude prices in recent years have driven up residential electricity prices on the islands to three to five times the average prices in the Lower 48 states, the EIA said.
Current lower gas prices and the development of standardized cryogenic shipping containers allow trucking, rail transport and shipping of LNG in small amounts like other cargo in containers. Once received by ship, the LNG can be connected to portable regasification units next to electric power plants or industrial facilities, overcoming earlier regasification and bulk shipping problems that barred islands from importing LNG, according to the EIA.
Hawaiian utilities and Puerto Rican industry have started testing the economics of small-scale LNG imports, the EIA said. Puerto Rico has an independent power plant operating on natural gas imported as LNG at a terminal next to the plant. The Puerto Rico Electric Power Authority has also converted a petroleum-fired generating station to use LNG imported to that terminal and plans to convert another petroleum-fired station if it receives federal approval for a floating off-shore LNG receiving terminal.
In Puerto Rico this fall, two privately owned bottling plants in the industrial north will start receiving containerized LNG shipments, according to the EIA. The LNG will come from third-party suppliers from southeastern U.S. peak-shaving plants and will ship from Jacksonville, Fla., the EIA said.
Hawaii received its first shipment using a standardized cryogenic container in April, the EIA said. The shipment was about 670,000 cubic feet of LNG from a Boron, Calif., liquefaction plant. The LNG was transferred through the port of Los Angeles to Honolulu for regasification and injection into the Hawaii Gas distribution system.
Also, the power utility Hawaiian Electric took bids to have LNG delivered in similar standardized containers to eight generating plants on Hawaii's five main islands. The utility is requesting about 39 billion cubic feet per year and evaluating whether relatively low LNG prices justify switching away from diesel and residual fuel oils currently used at some of its generating capacity, according to the EIA.
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