Carib Energy Solutions is not the name that comes to mind when people think of LNG. Most people will think of large export terminal developers such as Cheniere or Freeport LNG. However, a small company, Carib, has secured both Free Trade Agreement (FTA) and non-FTA export licenses from the United States Department of Energy (DOE). How small is small? Carib is licensed to export 30 million cubic feet per day (mmcf/d) to FTA countries and 40 mmcf/d to non-FTA countries (compared to Cheniere’s Sabine Pass facility with a maximum capacity of 3,600 mmcf/d).
Although the quantities are small, this is an interesting project because of the niche market that Carib will be serving and the logistical model it is employing. In May 2013, Carib was acquired by Crowley Maritime, a shipping company with operations in the Caribbean, Latin America and Puerto Rico. Crowley is seeking to leverage its existing shipping infrastructure to supply LNG to markets not connected by pipelines or too small to be served by full-sized tankers. Instead of using full-sized tankers to supply these countries, Crowley is using smaller, 10,000 gallon ISO containers that will be transported by truck and loaded directly onto ships for delivery. Here is a map of regasification facilities in the Caribbean, South America and Latin America. Small islands such as Puerto Rico currently rely on diesel fuel or heavy fuel oil to supply a lot of their energy needs. Given that natural gas is now available cheaply in the United States and is a cleaner burning fuel there is a lot of interest and demand to replace diesel with LNG. For example, Crowley has already secured contracts with Coca Cola to supply two plants in Puerto Rico with LNG. Crowley claims that LNG shipments are scheduled to start in late 2014.
However, Crowley is not the only company that is trying to supply the Caribbean with LNG. Another company, Cambridge Energy, is seeking to develop a floating liquid natural gas (FLNG) platform in Louisiana to help serve this small market. Cambridge is focusing on LNG to power markets and projects that need less than 300MW. Carib and Cambridge are two examples of companies employing new business models to further monetize the recent boom of natural gas production in the United States. This is another example of how the boom in U.S. natural gas production is impacting both large global markets, and smaller regional markets.
-Tyler Wilson and Uday Turaga
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