Tiny Pacific island eyes LNG market debut with supply deal

By Stephen Stapczynski and Anna Shiryaevskaya on 8/9/2019

SINGAPORE (Bloomberg) - New Caledonia, a French territory in the South Pacific, is joining the global liquefied natural gas boom with a plan to use the cleaner-burning fossil fuel in power generation.

The island group with a population of 280,000 is seeking suppliers for its planned Centrale Pays Project, a floating LNG terminal and 200-megawatt gas-fired power plant. Nouvelle-Caledonie Energie, the project’s developer, is pitching for a 15-year LNG or regasified fuel contract, according to an expression of interest seen by Bloomberg.

Small buyers for LNG such as New Caledonia are popping up around the world to feed demand for the fastest-growing and cleanest fossil fuel. While the island’s needs of about 200,000 tons of LNG a year are a fraction of what a nation like France imports annually, it adds to the interest for the fuel outside of developed markets in Japan and Europe.

NCE is a venture between the government, the island’s electricity producer, its grid operator, and nickel producer SLN owned by Eramet SA. NCE ruled out onshore LNG storage and regas facilities.

The new power station will replace a 45-year-old facility built inside SLN’s plant in the city of Noumea, providing most of its output to SLN and some to the public. The import terminal and power plant are expected to start up in the second half of 2023.

Supply deal details:

  • LNG delivered on ex-ship basis, or revaporized LNG; will consider free-on-board offers
  • 15-year contract will start between July 1, 2023, and June 30, 2024
  • Priced against crude oil or Henry Hub, or combination of the two benchmarks
  • Two cargo sizes: 40,000 m3 or 80,000 m3
  • Will consider partially loaded full-size carriers of up to 120,000 m3
  • Submissions due by Aug. 29
  • Short-listed applicants expected to get request for proposal documents in the second quarter of 2020

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