US, Trinidad back regional gas conversions

OREANDA-NEWS. April 09, 2015. US President Barrack Obama and leaders of 15 Caribbean countries will discuss proposals tomorrow for enhancing the region's energy security by boosting the use of natural gas and renewables for power generation to replace oil that is mainly supplied by Venezuela.

The proposals are grounded in the imminent start-up of US LNG exports and a new \\$1bn fund set up by the Inter-American Development Bank and Trinidad and Tobago to help countries convert power plants from oil to gas, Trinidadian and Jamaican officials tell Argus.

Obama arrives in Jamaica tonight and leaves tomorrow for the hemispheric Summit of the Americas in Panama on 10-11 April.

"Although they are not talking publicly about it very much, many of the leaders who will be meeting President Obama are growing increasingly concerned about their energy security given the deteriorating condition of the Venezuelan economy," a Jamaican energy ministry official told Argus.

Under Venezuela's PetroCaribe program, state-run PdV supplies several Caribbean and Central American countries with crude and refined products, allowing them to keep a part of the payment as a long-term, low-interest loan.

Of the regional governments that will meet with Obama in Kingston, 10 are signatories to PetroCaribe, which was founded in 2005 by late Venezuelan President Hugo Chavez.

Trinidad and Tobago and the IDB have agreed on the structure of the fund to improve the region's energy security, and Obama will be asked to support it as part of Washington's plans to wean countries off Venezuelan oil, a Trinidadian official said.

"We will be in a position to supply much of the region's natural gas, and so will the US," the official said.

Trinidad?s Atlantic LNG facility, launched in 1999, is already a major regional supplier.

The fund will help Caribbean countries transform their energy matrix by converting oil-fired power plants to burn gas, Trinidad and Tobago's government says.

Trinidad and the IDB are seeking support for the fund from the World Bank, the International Monetary Fund, the Caribbean Development Bank and the private sector.

Tomorrow?s talks are an offshoot of a January 2015 meeting in Washington in which US vice-president Joseph Biden pledged US support for the development of alternatives to oil, including renewables and gas.

PetroCaribe is "not sustainable," Trinidad's development minister Bhoe Tewarie said.

The Jamaican energy ministry official was more pointed. "The leaders are wary about being caught in the middle of a diplomatic and trade war between the US and Venezuela, but are concerned about their energy future despite the fall in the price of oil — a situation that many fear will not last for too long."

Last month, Washington expanded targeted sanctions on senior Venezuelan officials mainly for alleged human rights abuses. Caracas subsequently launched a high-profile campaign calling on Obama to repeal his executive order, gathering millions of Venezuelan signatures for a petition that President Nicolas Maduro is expected to unveil in Panama.

Alternatives to PetroCaribe oil supply could erode regional political support for Caracas, even though Cuba, Nicaragua, Ecuador and Bolivia remain firm allies.