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Hawaii Gas, which became the first company to ship liquefied natural gas to the Islands, is looking to significantly expand these shipments in an effort to help diversify Hawaii's fuel supplies to reduce the state's dependence on oil and help lower energy costs.
The state's only franchised gas utility said this week that it is seeking proposals from developers around the world to supply LNG in bulk to help it support the delivery of natural gas to existing and prospective consumers in the state through the use of a floating storage and regasification unit and other services to receive, store and regasify the LNG for distribution.
The Honolulu-based company, a subsidiary of Macquarie Infrastructure Co. (NYSE: MIC), said it has been working with key stakeholders on developing a LNG plan for the state, given the potential this fuel has to diversify Hawaii's fuel supplies.
Using natural gas as a fuel for power generation complements the intermittency of solar and wind to create the lowest-carbon and lowest-cost solution for Hawaii available today, said Hawaii Gas, which noted that its plan will address the statewide demand for natural gas for residential, commercial, institutional and industrial, power generation and ground and marine transportation uses.
"The high cost of energy is harming Hawaii's economic future, but there are steps we can take now to reduce costs and increase our energy security," Alicia Moy, president & CEO of Hawaii Gas, said in a statement. "Hawaii Gas is committed to swiftly and responsibly exploring and securing a bulk supply of LNG at the lowest possible cost to benefit all energy users on all islands and for all industries throughout Hawaii. We believe a bulk LNG solution will provide substantial savings while serving as a transitional fuel as Hawaii moves away from oil to renewable resources."
Joseph Boivin, senior vice president of business development & corporate affairs for Hawaii Gas, noted that the company has studied the demand and supply sides of the equation and has determined that bulk LNG supply and delivery solutions make the most sense for the state.
Hawaii Gas could bring in bulk shipments as early as late 2018, he said.
"The supply agreements that we are seeking will be flexible to accommodate changes in LNG demand over time as Hawaii's energy efficiency and renewable energy use increase," Boivin said in a statement. "The plan will leverage our existing infrastructure as the state's only regulated gas utility."
Hawaii Gas said the deadline for submitting bids for bulk LNG shipments is Feb. 16, 2015.
In October, it filed an application with the Hawaii Public Utilities Commission to further diversify the fuel supply for its Oahu utility pipeline customers by converting up to 30 percent of the synthetic natural gas production at its SNG plant in Kapolei in West Oahu to LNG.
A few months before that, Hawaii gas began shipping in LNG in containers for use as a backup fuel source for its SNG operations.
