Prime Minister Mercelina Updates Parliament on LNG, Fuel Diversification and Energy Priorities

GREAT BAY--Prime Minister Dr. Luc Mercelina provided Parliament with an update on government’s current position regarding LNG and broader fuel diversification during Monday’s Question Hour public meeting of Parliament, emphasizing that the immediate priority remains stabilizing electricity supply for residents and businesses while advancing renewable energy targets under the existing electricity concession framework.

The Question Hour was convened following questions submitted by MP Francisco Lacroes on St. Maarten’s national strategy for fuel diversification, LNG, public utilities, and community benefits. In his responses, Prime Minister Mercelina said government has engaged key entities, including Port St. Maarten Group and NV GEBE, to inform decision-making and to clarify what is technically and financially feasible under current assumptions.

Regarding Port St. Maarten Group, the Prime Minister explained that the port functions as a facilitator, with fueling services executed by third-party providers, and that diversification in marine fuels ultimately depends on carrier demand. He noted that Port St. Maarten Group is engaged in discussions with cruise lines and other stakeholders, taking into account environmental, social and governance priorities and the cruise industry’s commitment to carbon neutrality by 2050. From the port’s perspective, diversification efforts include electrification of port operations, expansion of solar and wind energy, waste-to-energy initiatives, and exploring alternative bunkering options including transitions away from heavier fuel types.

On the utility side, the Prime Minister pointed to NV GEBE’s Least Cost Power Development Plan (LCPDP), prepared by Energy Nautics, which reviews fuel options for power generation and highlights significant capital requirements tied to LNG infrastructure, including storage and regasification. He indicated that while existing generators may be technically capable of operating on natural gas, the analysis did not evaluate a transition to LNG as viable under the assumptions used, and that small-scale LNG was also assessed as less efficient and more costly.

Prime Minister Mercelina told Parliament that government’s approach is being guided by expert advice, including findings presented to the Council of Ministers in December 2024 through a Trust Fund financed study, which did not consider LNG due to substantial additional capital costs and price volatility risks. He said the same analysis points to renewables, particularly solar, as a more predictable long-term investment option with lower projected electricity costs when compared to LNG.

In outlining concrete steps underway, the Prime Minister said government is taking measures to ensure compliance with obligations in the electricity concession issued since July 16, 2010, and has requested a high-level overview from NV GEBE related to long-term maintenance planning and impacts on security of supply through a formal letter dated June 17, 2025. He added that NV GEBE has requested government land to advance its first solar project, which remains under review by the Ministry of VROMI, and that the government will assess proposals for alternative energy sources based on technical guidance and expert input.

Addressing the motion-linked questions raised by MP Lacroes, the Prime Minister stated that government is not currently pursuing the establishment of a joint venture among the port, NV GEBE and government for LNG procurement, storage, and distribution, citing the need for stronger justification based on current findings. He also indicated that the shareholder will not impose a specific requirement or deadline at this time for NV GEBE to analyze LNG feasibility, noting that immediate actions are being directed toward stabilizing electricity supply.

On affordability and oversight, Prime Minister Mercelina referenced NV GEBE’s tariff study and its recommended safeguards, including cost-reflective tariff design, benchmarking against the region, a monthly fuel price adjustment mechanism, and progressive block tariffs to protect low-income households. He further noted that government is working toward strengthening regulatory oversight through the Bureau Telecommunication and Post (BTP), and that draft legislation to support BTP’s regulatory role has been prepared and is being adjusted based on received feedback before it proceeds through the Council of Ministers and Parliament.

During follow-up questions, the Prime Minister provided additional clarification on solar scale requirements, stating that approximately 5,000 square meters of solar panels are needed to generate 1 MW of electricity. He said the current approach to siting solar includes the use of existing rooftops, parking areas, and an estimated one to two hectares of land, while indicating that further details regarding land arrangements would be provided.

The Prime Minister concluded by reaffirming that government’s policy direction centers on “stability, sustainability and affordability” of the energy supply, with renewable investments forming a core part of the country’s path forward.

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