Report

to

Public Service Commission

on

WAPAs LPG Project Status

Presented by: Hugo V. Hodge, Jr.
Executive Director

WAPAs LPG Project

WAPAs LPG Project has become a model for the Caribbean Region.
For most Caribbean islands, converting to the use of propane as the primary
fuel source for power generation represents the best near-term option to
significantly reduce the cost of fuel for power generation, while ensuring
widespread economic benefits.
We have received numerous inquiries, and requests for information, on our
approach and progress regarding this conversion process, which has taken on
a life of its own.
The entire region is looking at WAPAs project intently to see how the model
can be adapted in their respective areas.
The project will advance a number of initiatives:
Modernize existing facilities
Increase the use of efficient technologies
Make continued investments in the use of renewable energy sources

Propane Project Status

Throughout the process of our propane conversion, there have been
complicated circumstances which were unforeseen at the time the
project was launched last year. These circumstances have resulted in
the need to adjust the project completion schedule. Transition to
propane as the primary fuel source is scheduled to begin by the end first
quarter 2015.
Unfortunately from the early phases of the project, adverse weather
conditions presented a delay, particularly for excavation on St. Croix.
Also undocumented soil conditions and underground obstacles on St.
Croix presented unforeseen challenges. On St. Thomas the volume of
rock needed to be removed from the site was much greater than
anticipated.

Propane Project Status

Additionally, we encountered a number of circumstances that contributed to

the need for the project schedule adjustment.
Greater challenges than anticipated for coordinating the conversion of the
power plants to safely burn propane while simultaneously operating power
generating facilities to meet daily electricity demand.
Extended work required for the design, procurement and installation of
the necessary resources to upgrade the Authoritys existing fire protection,
controls and systems for the safe use of propane.
The complexity of permitting, contracting, demolishing and disposing of
structures with lead-based paint.
The reality of global sourcing of all the materials and equipment for the
project.
Additional regulatory requirements to be complied with to assure the
safety and the security of the marine aspect of the project, including
necessary engineering and redesigns.

Propane Project Status

Since signing the initial contract in July 2013, the project partners have
implemented an aggressive schedule to deliver the benefits of the propane
conversion to the Territory as soon as possible.
The project commenced with an initial estimated project budget before
the front end engineering and design (FEED) was complete.
Following the completion of the FEED, the project leadership anticipated
the needed adjustments to the budget from $87 million to $150 million,
which resulted from the improvements deemed necessary, refined design
specs, unknown obstacles like the pilings and regulatory
recommendations, etc.
Although the projects costs have increased, customer savings from the switch
to propane will not be impacted.
WAPA remains committed to maintaining savings for all customers, and
fuel costs will still be reduced to the anticipated 30% due to the conversion
from fuel oil to propane, along with the estimated 20% reduction in
greenhouse gas emissions
These fuel cost savings will be passed along directly to customers.

Propane Project Status

The increased cost of the project is being shared by the project partners,
WAPA and Vitol.
Vitol is still paying all upfront costs and WAPA will now repay Vitol
according to a new amortization schedule.
WAPA and Vitol had previously agreed to an amortization period of seven
years with the option to complete payment in five years.
The amortization period has been extended to ten years, with the option
to complete payment in seven years.

Notwithstanding the aforementioned, the projects in both Districts (St.

Thomas & St. Croix) are progressing positively and have already achieved
many accomplishments to include:
All demolition and earthwork completed in both districts.
Engineering, electrical, instrumentation automation, process design, civil
design, structural design, piping & mechanical design are complete.
All main contracts for the entire project scope are let.
Electrical and Mechanical contractor has mobilized and on site
performing work.
Construction of the land terminals in both districts are well underway.

Propane Project Status

St. Thomas Project Site Before Blasting and Construction Activity

Propane Project Status

STT Tank Mound

Construction

Control Room
Construction

Propane Project Status

Construction
Activity, St. Thomas

Propane Project Status

Vaporizer Construction,
St. Thomas

Construction Activity on
Control Room, St. Thomas

Construction Activity Inside

Mound, St. Thomas

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Propane Project Status

St. Croix Project Site Before Construction Activity

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Propane Project Status

Control Room
Construction, St. Croix

Vaporizer Construction,
St. Croix

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Propane Project Status

Overview of
Construction Activity,
St. Croix

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Propane Project Status

Procurement
Source & Delivery of long lead items completed (Storage
Tanks, Valves, Vaporizers, Emergency Generators, etc.).
Equipment is coming in on daily basis with last items due
in early January 2015.
Contractor for marine works (jetty, docking facilities and
the permanent mooring for the VLGC) will mobilize in
January 2015.
Fabrication of 18 propane storage tanks is complete and
delivered to WAPA. 10 tanks are currently stored at the container
port on St. Croix. ( 8 storage tanks earmarked for the Richmond
facility was safely transported to the Estate Richmond Plant Site
and positioned for permanent installation).
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Propane tanks stored at STX

Container Port

Propane tanks
set sail from Container Port

15

Propane Project Status

8 LPG Storage Tanks Positioned for
Permanent Installation on St. Croix

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Propane Project Update

Storage tanks will be mounded - encased by layers of earth, sand, rock and
gravel to maximize safety. ( 165 ft. L x 18 ft. dia. x 30 ft. H.) (Wt. 315 tons)
The benefits of mounded tanks include:
Significant protective barrier from external damage and fire
Elimination of oxygen, preventing uncontrolled ignition
Additional barrier for earthquake and hurricane protection
Tank Size

St. Croix (8 tanks)

St. Thomas (10 tanks)

Total Storage Capacity

10,400 m3
65, 500 bbls.

14,000 m3
88,000 bbls.

Effective Supply

19.2 days

18.3 days

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Propane Project Status

Air permits for both terminals have been issued
20 percent reduction in greenhouse gas emissions compared to fuel oil
Over 80 percent reduction in particulate matter (soot), Sulfur Dioxide,
and Carbon Monoxide emissions.
Propane helps to integrate renewable sources of energy into the grid.

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Propane Project Update

Initial storm water permits for both terminals have been issued.
St. Croix CZM Major Land and Water Permits have been approved.
St. Thomas CZM Major Land Permit has been approved. The Major
Water Permit awaits the V.I. Legislature ratification (December 2014
Session).
On the federal water side, the U.S. Army Corps of Engineers (COE) is
continuing to review our applications for both sites and is in the
process of preparing to issue public notices of the projects in the
coming week. We dont foresee any obstacle that would disallow the
COE from granting authorizations.
Continue to stress importance of the project schedules and
commitment associated with them, but we have no control of
timing on their review and approval process.

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Propane Project Update

Emergency Response Plans for each facility are in the process being
modified & updated to reflect the use of LPG as a fuel source at our
facilities.
The Waterway Suitability Assessment (WSA) Plan, which focuses on
the water side safety & security aspect of the projects, was submitted to
USCG for approval.
Stakeholders meetings sponsored the USCG were held on St. Croix
and St. Thomas on October 29th and 30th , respectively to provide an
overview of the WSA Plan.

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Propane Project Status

Completed Comprehensive Fire Risk Assessment and Hazardous Area
Classification Study
Completed Phase 1 design/engineering for upgrade to the facilities fire
protection and control system.
Phase 1 includes all detectors, monitoring and control systems,
hazardous area classification changes, etc.
Phase 2 includes all upgrades to the plants fire water suppression
system to bring into code compliance; fire detection and foam and
water suppression system for all items propane and fuel oil related,
also to bring facilities into regulatory and insurance compliance; and
all other API and National Fire Protection Association (NFPA)
compliance upgrades.
Working VI Fire Services and other first response agencies on
planning and design of fire detection and protection systems, as well
as fine tuning fire and emergency response plans.
Fire safety features planned for WAPAs propane project will have 100%
redundancy

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Propane Project Status

VITEMA, with support from the U.S. Department of
Homeland Security, is finalizing an independent
vulnerability assessment study to ensure all of the local
and federal mandates for safety and security are met.
Ensure that every precaution is taken to protect the wellbeing of,
not only the general public, but also the employees of the utility
and the first responders who come onto the scene to manage any
possible eventualities.
Structure partnership with VIWAPA to expand communication on
public awareness, as well as on safety and security measures of the
projects.

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Propane Project Status

Built and commissioned new propane delivery vessels (the Epic Curacao and Epic
Caledonia) specifically to deliver liquefied propane to WAPAs facilities.

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Propane Project Status

GE mobilized and commenced conversion works on the turbines. (1 unit

completed in each district. 1 more in process on St. Croix and another
commencing in St. Thomas within the next 2 weeks).
Gas Inlet
Compartment

Sealed Turbine
Compartment

Control System
Upgrade

Control Cabinet
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