Caribbean countries have long been burdened by high electricity costs and heavy reliance on imported heavy fuel oil to run their power grids. Moving away from dirtier petroleum products to lower-emission alternatives has remained an urgent economic and environmental goal. Now Excelerate Energy has announced a long-term supply agreement with AxDo Bahamas, a joint venture between Swiss energy trader Axpo and local operator Domicisle LNG, supporting a planned liquefied natural gas (LNG) hub that aims to help address this problem.
Under the agreement, AxDo will buy up to 16 trillion British thermal units of LNG a year from a planned offshore terminal near Grand Bahama. For those not familiar with the energy sector, natural gas takes up much less space when it is cooled into a liquid. That means it can be shipped across oceans and then turned back into gas to run power turbines or fuel large vessels.
The project is being developed in two connected stages, linking the infrastructure of neighbouring Caribbean countries. Excelerate plans to begin gas deliveries to The Bahamas in 2027, using its logistics and supply operations in Jamaica, where it now operates LNG terminals. If final permits are approved, a permanently moored floating storage unit will be deployed near Grand Bahama in 2028, acting as a deep-water fuelling station and distribution depot.
Grand Bahama is a sensible location for global shipping. The proposed hub sits on one of the busiest cruise and shipping routes in the world and will be used for marine bunkering, which is what the maritime industry calls refuelling ships. As international maritime rules put tighter limits on ship emissions, major cruise lines and cargo ships on the route between North America and the Caribbean are increasingly moving to cleaner-burning fuels.
A reliable local supply of natural gas, together with maritime trade, gives island utilities a practical way to stabilise power generation. Generating electricity from natural gas produces less air pollution and lower carbon emissions than heavy fuel oil, so Caribbean communities can cut fuel costs while also reducing environmental harm.
Regional logistics providers are showing how island states can work together on shared energy security by joining up existing operations in Jamaica with new, focused infrastructure in The Bahamas. It reflects a growing wish among emerging island economies for regional infrastructure networks that meet strict international climate rules and protect local consumers from swings in global fuel prices.
