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WAPA Takes More Time to Evaluate LNG/LPG Respondents

So many companies responded to the V.I. Water and Power Authority "request for qualifications" for liquified natural gas and liquified petroleum gas that WAPA has extended the deadline for deciding who will make the short list of finalists, the utility announced Thursday.

WAPA was initially to have announced the list Thursday, but when the day came, the authority reported instead that it was advising respondents it will not make the selection until Dec. 17.

According to Executive Director Hugo Hodge Jr., the larger-than-expected response and the complexity of those responses require additional time for WAPA’s technical and legal team to comprehensively evaluate each company’s qualifications.

“We were very pleased with the interest in the RFQs," he said. "However, there is a significant amount of detail in the responses and additional time will be needed to truly evaluate this most critical next step in the authority’s fuel diversification.”

The evaluation team will determine the most qualified respondents based on scores assigned to weighted measures, including project timeline and project permitting process, which weigh 35 percent in the decision; general qualifications and proposed solution, 30 percent; financial capacity and financing plan, 20 percent; and single point of accountability, 15 percent.

The authority entered the RFQ process to identify companies capable of implementing and operating a solution to supply natural gas and/or propane. The successful respondents will have demonstrated a proven track record in the industry, according to WAPA.

Gregory Rhymer, WAPA’s chief operating officer who chairs the evaluation team, said that the LNG or LPG supplier must develop infrastructure to import and deliver natural gas and/or propane to St. Thomas’ Harley Power Plant and St. Croix’s Richmond Plant.

Respondents to the RFQs must also demonstrate how they can successfully overcome some of the anticipated challenges, including shipping, safe unloading and storage facilities, permitting regulations, dock improvements, dredging that may be necessary and unfavorable price volatility possible in the LNG and LPG market.

The authority’s “Energy Production Action Plan,” recently published by the WAPA governing board and available for viewing at www.vwiapa.vi, says significant benefits could be realized by converting the generating facilities in the territory to LNG and/or propane.

Benefits include a potentially lower cost of generation relative to fuel oil; comparable fuel cost to coal; improved fuel consumption efficiencies in gas turbines; reduced maintenance costs relative to oil generation; fuel supply diversity; potential infrastructure for additional uses of natural gas such as industrial use or transportation fuel; and lower carbon dioxide and other pollutant emissions compared to fuel oil and coal plants.

WAPA issued the request for qualifications in early October, and by the Nov. 9 deadline had received 13 responses.

Five companies submitted qualification packages to supply propane:
– Geogas Trading SA & Polaris Engineering Inc.;
– Empire Gas Company Inc.;
– Trafigura;
– TropiGas de Puerto Rico Inc.;
– and VITOL Group.

Eight companies submitted qualification packages to supply liquefied natural gas:
– Argent Marine Management Inc. (Maresk Line Ltd & Shell Gas & Power Development Management);
– Carib Energy, BP, EC & SEA One AG;
– Cheniere Marketing LLC;
– Gas Fin Development SA;
– LNG Enterprises LLC;
– Pacific Rubiales Energy Corp.;
– S.S.M. LLC;
– WEC Bay LLC , VI Waller Marine Inc. & ESI.

WAPA plans to notify the successful company or companies selected from the shortlist by early 2013 and begin final negotiations, Hodge said.

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