Friday, August 12, 2022

Puerto Rico electric utility rejects offshore gas terminal contract’s termination

By on August 6, 2017

SAN JUAN – Puerto Rico’s electric utility says it does not acknowledge the validity of Excelerate Energy’s cancellation of its contract to construct a liquefied natural gas import terminal off the southern coast of the island.

Excelerate told Caribbean Business last week that the contract with the Puerto Rico Electric Power Authority (Prepa) for the construction of the Aguirre Offshore GasPort (AOGP) was canceled because of the uncertainty caused by the public corporation’s bankruptcy, but that they were in talks to renegotiate a new contract.

However, Prepa said this weekend that the construction and lease contracts related to the AOGP project are in full force and effect.

The GasPort is an important component for Prepa to continue its fiscal plan, business model and the diversification of its energy sources in compliance with environmental regulations.

A proposed location of the Offshore GasPort and 4-mile-long, 21-inch outside diameter subsea pipeline connecting the terminal to the Aguirre Plant. (Screen capture of www.energy.gov)

As part of a Saturday statement Prepa said it “does not recognize the validity of the termination of contract letter submitted by Excelerate Energy, and thus discussion was begun to reach an agreement on this controversy.”

If the talks are unsuccessful, Prepa says it will continue its intention to enforce its contractual rights under the agreements signed with Excelerate and the Title III process of the federal Promesa Law underway.

Excelerate renegotiating Aguirre Offshore GasPort deal with Prepa

The Puerto Rico Energy Commission (PREC) has given the utility until Aug. 9 to explain why its process to determine the feasibility of the gas terminal was not rendered moot after the contract was terminated and how that affects the project’s evaluation.

PREC questioned Prepa for failing to inform it that Excelerate had canceled the contract on June 27 while the regulator was holding hearings on the project.

“The technical hearing of the Energy Commission of Puerto Rico on the present proceeding was carried out from June 26, 2017 to June 28, 2017. However, this development was not disclosed to the Commission during the technical hearing nor during the month following such notice of termination. The Commission is concerned about an apparent lack of transparency of the Puerto Rico Electric Power Authority in relation to an event closely related to the current process,” PREC says in an order, adding that it is concerned about the impact of the contract’s termination.

You must be logged in to post a comment Login