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Where will WAPA get it's Oil from?

DaChief
March 10, 2012 09:05AM

Registered: 2 years ago
Posts: 129

Just a thought- have "heard" that WAPA still hasn't secured a Fuel Supplier for the 2 Oil and limited amounts of 6 Oil for STT and STX-

I know from my professional services that most of these contracts on the spot market are 90 days out, and probably the same with the long term contracts. The requirement is about 3500 bbls per day on STX and about 5000 bbls per day on STT- that amounts to 238,000 bbls per month.

If they stay with just 2 Oil, that would mean a Handysize Clean Product Tanker per month from the US Gulf to STX- then transshhipment to the respective island. If they continue with the mix of 2 Oil and 6 Oil- then it's a combined Clean/Dirty Tanker- still about one tanker a month. Charter rate on spot would probably be about 30,000 per day - 1 to load, 1 to discharge, 5 days to transit from say NYC- that's 210,00 for charter plus fuel- 173,000- so that's about 383,000 a month in tanker freight, plus the tankage. Getting a long term fix on both the oil as well as the freight would be in our best interest...

The 10-15 dollar per barrel Hovensa Discount will evaporate on 06/30- meaning the 2 Oil will now be 147 a barrel please all of the fees to get it to WAPA....Interesting....I believe that ALL of these bids must be Public as required by law...

Re: Where will WAPA get it's Oil from?

blu4u
March 10, 2012 09:55AM

Registered: 2 years ago
Posts: 855

Honestly, is WAPA's lack of forethought surprising? Given WAPA's (and the territorial Government's) track record for meeting financial obligations, they may have a hard time securing a contract. WAPA was "behind" in paying HOVENSA for discounted product. How the heck is WAPA planning to pay market price at today's high rate?

Re: Where will WAPA get it's Oil from?

HappyFace
March 10, 2012 10:53AM

Registered: 2 years ago
Posts: 146

No Bids are required on any emergency basis. That would only be for temporary relief!

Re: Where will WAPA get it's Oil from?

DaChief
March 10, 2012 02:28PM

Registered: 2 years ago
Posts: 129

This is NOT an Emergency Basis- However, I hav not seen any RFP's for the transport or procurement...

These are exerpts from the WAPA Website-

"HOVENSA’s refinery has been the sole supplier of WAPA’s fuel oil requirements for over 40 years. Now that the refinery is closing, WAPA is facing an unprecedented situation in which it is likely that it will have to arrange for other sources of supply on the open market, with the complexity that entails. Hodge, and the utility’s Chief Operating Officer, Gregory Rhymer, participated in all-day meetings today which will continue into Friday evening to explore all available options and to develop a program that will result in the best possible fuel supply arrangements for the benefit of the citizens of the Virgin Islands."

"The Virgin Islands Water and Power Authority Governing Board convened today on St. Thomas for its monthly meeting, where Executive Director Hugo V. Hodge Jr. updated the board on the current process of finding a new fuel supplier. Hodge said a list of potential suppliers that service various parts of the region is being assembled. “We have already compiled a list of seven, but we’ve received solicitations from dozens of companies,” said Hodge. “There is a lot of interest in this account.” Once the inquiries come in, Hodge said the companies are vetted based on supply, the specifications of the fuel they carry, the quantity in and the location of their storage, etc. “We’re doing something we haven’t done in over 40 years, which is finding a new fuel supplier,” said Hodge. “We have a lot of good leads and I am confident we will have no problem securing a fuel supply by the June 30 deadline.” "

Re: Where will WAPA get it's Oil from?

HappyFace
March 10, 2012 08:30PM

Registered: 2 years ago
Posts: 146

Anytime the health of the population is endangered "RFP's are not required" so if the territory can't get a satisfactory proposal they can buy what is necessary for the Health/Welfare of it's citizens.

Re: Where will WAPA get it's Oil from?

DaChief
March 10, 2012 08:38PM

Registered: 2 years ago
Posts: 129

Happy- So you're also an expert at RFP's? :-) No, I'm afraid I have written quite a few of those- I'll scour the VI Code, I'm pretty sure that they MUST issue an RFP.

I know that they have been submitting bids on a three year basis, with the last one last year- also for the transport...Careful, this is an area with which I am VERY familiar with.....

No, I'll bet that Hess continues to supply the .3% S #2 Oil and the .5% S #6 Oil only without the discounted rate- transshipped from either Houston or NY Harbor. They require about 3549 bbls a day at STX and about 5000 bbls a day at STT. I am wondering why these RFP's have NEVER been published to my knowledge.

I discussed the coming rate increase with one of the pincipals yesterday- my best estimate is .55 a kwh by third quarter, That's if it's delivert based on 147 a barrel. Brent was down to $125 yesterday...

Re: Where will WAPA get it's Oil from?

HappyFace
March 10, 2012 08:51PM

Registered: 2 years ago
Posts: 146

You do all the research you want of the VI Code, If the Request for Proposal doesn't satisfy what was "Proposed and Needed" by the USVI Gov, they have the right to reject and purchase whatever is necessary for the Health/Welfare of the citizens. This is basic Knowledge! If you're so familiar with RFP's why do you have to research it. Sorry DaChief don't have to be careful when I'm right!

Re: Where will WAPA get it's Oil from?

onthespot
March 11, 2012 06:58AM

Registered: 3 years ago
Posts: 380

HappyFace, you should run for Gov.

Re: Where will WAPA get it's Oil from?

OldTart
March 11, 2012 08:35AM

Registered: 2 years ago
Posts: 2,765

Quote
DaChief
This is NOT an Emergency Basis- However, I hav not seen any RFP's for the transport or procurement...

Just out of curiosity, are you in a position within the loop which would normally be advised of RFPs?

Re: Where will WAPA get it's Oil from?

DaChief
March 11, 2012 12:04PM

Registered: 2 years ago
Posts: 129

Yes, was, for many years until recently

Re: Where will WAPA get it's Oil from?

HappyFace
March 11, 2012 03:11PM

Registered: 2 years ago
Posts: 146

DaChief
What loop was that, you stated that the USVI hasn't made a RFP in years? Which ones were you Looped in?

Re: Where will WAPA get it's Oil from?

OldTart
March 11, 2012 03:48PM

Registered: 2 years ago
Posts: 2,765

Quote
DaChief
Yes, was, for many years until recently

OK, so you're not now in that "loop". I maybe should have worded my query differently or more substantively. If one is not "in the loop" how does one know what RFPs have gone out? I'm sure this is probably common/public information/knowledge if one knows where to look but it's not something that's automatically published in our daily newspapers. Is there anywhere where such information is readily available?

Re: Where will WAPA get it's Oil from?

DaChief
March 11, 2012 07:07PM

Registered: 2 years ago
Posts: 129

Simple. Until late 2010 I was "in the loop" at the management level. I still remain as a consultant to one of the transport concerns- largely on technical and regulatory issues.

I have received no less than six or seven phone calls dealing with various issues, future ops, you name it- I guess I still remain one of the players- though I choose not to become too directly involved because of my technical opinions regarding the operation of WAPA's Power Plants. The various ideas and strategies involved are daunting to say the very least- some might work, others not.

My biggest personal concern lies within the fuel cost. Also, the importation of LPG. These will directly impact the Territory's economic well being or lack thereof. I heard some good news regarding LPG this week....

The RFP's have been issued for years dealing with both the commodity as well as the transport parts of the evolution. The length of them vary, with them coming due soon.

It is my belief that some sort of deal will be struck bewteen Hess and VIG regarding some form of discounted fuel, or discounted tankage fees. It is also very interesting to note that unless WAPA gets an EPA Waiver for Emissions, the max Sulfur ranges between .3% and .5%, which keeps the SOX emissions down- that is the reason that the higher sulfur fuels from eslewhere in the Caribbean can't be utilized cheaply. The same goes with gasoline and diesel fuel at the pump- the gas mileage from gas in say Curacao- sucks. Aruba and Curacao are the closest large refineries-

Despite Happyface's input regarding the Emergency Clause, I don't feel that a no bid contract would be prudent or beneficial to the ratepayers- especially in light of all the present and upcoming financially related business closures. I especially feel that some of our energy alternatives are not being pursued aggressively enough- like IC Engine Technology and the direct impact of efficiency- which thereby would show an immediate impact on fuel consumption and thus kwh prices. Any one of these choices are a year away or more.

This is why it is so far important for all of us rate payers to be in the know regarding the fuel contracts.

Re: Where will WAPA get it's Oil from?

blu4u
March 11, 2012 10:41PM

Registered: 2 years ago
Posts: 855

Da Chief, Tells us more about the LNG opition. Is WAPA really looking at LNG? Isn't this one of the reasons that HOVENSA pulled up stakes--the VI Governments refussal to discuss a LNG supply station?

Re: Where will WAPA get it's Oil from?

DaChief
March 11, 2012 11:50PM

Registered: 2 years ago
Posts: 129

blu4u:

I have been working on HV (Heat Values) for Oil, LNG, LPG. The data is going to a friend on STX who will be meeting with interseted parties later this week. It will include thermo on the various different types- Steam Turbine, Gas Turbine, Medium Speed Motor. This is a rather tedious set of calcs.

It would be excellent to see LNG developed at the Hovensa site. They will be using LPG to run their GT sets. The isalnd will get their LPG supplies from that pool, but will be more expensive- But LPG, while cleaner and more efficient a fuel, also has a market volatility. However, the infrastructure for LNG is not presently available and is very expensive- the CNG option will likely be less costly than the LNG route. One of my early thoughts was that the Refinery would sell, reorganize and then later adopt LNG/CNG as a fuel source, since that would drive their fuel costs down and comply with the consent decree. But remember- the cost of the fuel discount to WAPA ran at a loss for the refinery for almost 35 millionor so a year, and I still haven't heard that WAPA paid the 30 million they owe.

By the way- I have reported Happyface- and encourage all of you who are verbally slapped by this individual to do the same. The more of us that report this type of behavior will go along way to shut it down.

This is a site for solutions- not the constant barbs and harassment.

Re: Where will WAPA get it's Oil from?

blu4u
March 12, 2012 01:12AM

Registered: 2 years ago
Posts: 855

Thanks Chief.

Ok some question for Chief and all you gassy experts... LPG is super expensive and LNG is cheaper, right? How feasible is converting first to LPG, then (once the storage and distribution facilities are in place) to LNG. Is it just a matter of industrial size "regulator and burner conversion kits"? Would LNG be stored off-shore in sub-aquatic tanks under pressure? Obviously, I am no expert, I like the idea of LNG. But I just don't see the VI government as "savvy" enough to overcome the potentially environmental oposisiton to LNG.

Another "fossil fuels 101" question: How much does futures speculation effect the end consumer price of fuel (gas at the pump /tank of propane)? What impact will the Iran embargo have on US fuel prices? Can Iran really close the straight of Hormuz (sp?)? If prices at the american pump achieve $10 per galon, will the US government provided incentives for revitalising the HOVENSA operation, maybe even cost cooperate on a LNG renovation?



Edited 2 time(s). Last edit at 03/12/2012 01:59AM by blu4u.

Re: Where will WAPA get it's Oil from?

Lucy
March 12, 2012 09:37AM

Registered: 6 years ago
Posts: 296

Wartsila has been in the territory; trying to pitch medium speed diesel engine generators. WAPA is cautious.....maybe because it wasn't their idea?

[virginislandsdailynews.com]

Still someone will need to come up with the financing .... and I doubt it will be WAPA. So it most likely will be another long drawn out RFP for a PPA. That assumes WAPA wants to go with diesel engines.

Re: Where will WAPA get it's Oil from?

JulieKay
March 12, 2012 10:02AM

Registered: 2 years ago
Posts: 1,338

Quote
DaChief

By the way- I have reported Happyface- and encourage all of you who are verbally slapped by this individual to do the same. The more of us that report this type of behavior will go along way to shut it down.

This is a site for solutions- not the constant barbs and harassment.

I'm reading this thread with interest and have nothing to add other than a big thumbs up of agreement for this.

There are "trolls" on all internet boards. But this board serves a very useful purpose - especially for people who are considering "the move."

If we all work together to discourage and ignore this behavior eventually it goes away.

Re: Where will WAPA get it's Oil from?

STXBob
March 12, 2012 10:28AM

Registered: 8 years ago
Posts: 1,814

Quote
JulieKay
If we all work together to discourage and ignore this behavior [trolling] eventually it goes away.

I agree. The best way to discourage trolls is to IGNORE them and to REPORT them and get their accounts deleted. The best way to encourage trolls is to RESPOND to them in any way, since that is their goal.

Re: Where will WAPA get it's Oil from?

blu4u
March 12, 2012 10:35AM

Registered: 2 years ago
Posts: 855

Wowzza! Happy Face does have some vaild points. Check out the property tax thread, among others. Censorship is slippery slope folks. Everyone has the choice to ignore certain posters or threads.



Edited 1 time(s). Last edit at 03/12/2012 10:38AM by blu4u.

Re: Where will WAPA get it's Oil from?

JulieKay
March 12, 2012 11:23AM

Registered: 2 years ago
Posts: 1,338

I'm not saying censorship - I'm saying ignoring the bad behavior. Everyone has a point to make - just the personal attacks aren't necessary (and are against the terms of use). :)

Re: Where will WAPA get it's Oil from?

DaChief
March 12, 2012 02:09PM

Registered: 2 years ago
Posts: 129

Yes, let's restore some much needed civility in these threads- afterall we all working together for a better VI....

This AM I am working on square foot calcs on my Ballast Deep Tanks- very large internal stuctures with alot of internal structures and sub-structures, they are trapezoidal tanks in the horizontal and vertical planes with a web bulkhead design between stations. The Frames are dissimilar and differ in structure between the upper and lower stringers.....

Will get back to the discussion this PM- while I am doing the HV's.....Hey Lucy- got any block coefficient and fill formulas for such tanks? On Tankships the rule of thumb is ft3(.6)- but those are wide open tanks- not filled with alot of substructure. I am scaling out every bulkhead, web, frame, deep frame, flanges stiffener, longitudinal, top, bottom and side. It's all in Dutch and in Metric....

Re: Where will WAPA get it's Oil from?

OldTart
March 12, 2012 02:30PM

Registered: 2 years ago
Posts: 2,765

Sorry to butt in, DaChief, but I asked a question about RFPs and how someone not in any loop can access information about them. Would appreciate knowing when you have a chance. Thanks.

Re: Where will WAPA get it's Oil from?

DaChief
March 12, 2012 02:44PM

Registered: 2 years ago
Posts: 129

OT- Real quick, since its break time for me- The VI Code states that any procurement by WAPA above $2500 must be a bid item, except for long term sole sourcing, emergency procurement. These RFP's have not traditionally been posted on the WAPA website, but have been posted in WAPA.

I am scouring the net every day for any RFP's- but still haven't sighted one- VI Code states that they MUST be public, though not advertised. You can easily figure out who I worked with for over a decade- and was intimately involved on the transport end. Traditionally, there have been RFP's issued before....They go to "interested parties" only.

Some of our local people have recently shown an interest in a bunch of these proposals- but I don't know how far they took the issue. My point is that it is in the public's interest to know, on a quarterly basis- how much are they actually paying for fuel? According to the last WAPA internal newsletter- only 89.1% of the LEAC goes to fuel, 2.98% to Finance & Regulatory, 7.91% for Under Recovery- that's based on a LEAC of .3476 a kwh...

Gotta go- very busy

Re: Where will WAPA get it's Oil from?

HappyFace
March 12, 2012 03:11PM

Registered: 2 years ago
Posts: 146

Quote
HappyFace
You do all the research you want of the VI Code, If the Request for Proposal doesn't satisfy what was "Proposed and Needed" by the USVI Gov, they have the right to reject and purchase whatever is necessary for the Health/Welfare of the citizens. This is basic Knowledge! If you're so familiar with RFP's why do you have to research it. Sorry DaChief don't have to be careful when I'm right!

DaChief did you just state Emergency procurement?

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