A planned offshore natural gas project set to provide fuel to the Puerto Rico Electric Power Authority's Central Aguirre power plant could be in jeopardy in light of the power utility's bankruptcy.
Working in cooperation with PREPA, Excelerate Energy LP subsidiary Aguirre Offshore GasPort LLC has been developing the project to receive, store and regasify LNG for delivery to PREPA's existing Aguirre power complex in Salinas, Puerto Rico.
The board authorized to oversee Puerto Rico's troubled public finances unanimously approved a bankruptcy filing in June that allows PREPA to restructure $9 billion in debt through a process known as Title III. Excelerate Energy subsequently notified PREPA that it would end the contract and vessel charter agreement for the Aguirre GasPort Project.
But PREPA disputed the notice of termination, calling it "invalid," and stated that the agreement is still "in full force and effect," according to an Aug. 4 news release. PREPA said it has informed Excelerate Energy of its position and discussed possible remedies to the situation. But if talks are unsuccessful, the power utility will enforce its contractual rights within the ongoing Title III proceeding, the release noted.
The Gasport project is "an important component of PREPA's ongoing transformation and PREPA intends to proceed with the project consistent with its business and fiscal plans," the utility said.
PREPA is working to cut its dependence on oil by using more natural gas, which could lead to lower electricity costs for the island, according to a website for the GasPort project. The Aguirre power plant was chosen because it has the largest generating capacity on the island and the highest fuel cost of all PREPA facilities.