First Reserve’s Energy Infrastructure Fund has teamed up with Beowulf Energy to acquire a majority stake in the Eastern Caribbean Gas Pipeline Co., which intends to build an approximately 880km subsea pipeline. The Eastern Caribbean Gas Pipeline is a two-phase project to supply natural gas from Tobago to other eastern Caribbean islands.
The first phase consists of the construction of a 300km subsea natural gas pipeline between Tobago and Barbados, and the second phase will extend the pipeline an additional 580km to other eastern Caribbean islands including Martinique and Guadeloupe.
The pipeline is expected to significantly lower the cost of electricity in islands including Barbados, where fuel oil is primarily relied upon for electricity generation. Once the debt financing for the pipeline project has closed, First Reserve’s Energy Infrastructure Fund will have the option to become the majority owner of Eastern Caribbean Gas Pipeline Co.
R. Gregory Rich, spokesman for ECGPC said: “The company is excited to have Beowulf and FREIF as majority project sponsors in this ground-breaking regional energy infrastructure project. The extensive energy infrastructure experience and substantial financial resources of Beowulf and FREIF will accelerate the implementation of this regionally important project, thereby creating long-term value for the company’s investors while delivering tangible financial and environmental benefits to the islands served by the pipeline.”
Phase I of the project is scheduled to begin construction mid-2013, and is projected to deliver gas by late 2014 or early 2015.