A Wave of Modernization in the South Pacific
The South Pacific region, thrashed by the heavy military action of its past, has longed for modern infrastructural upgrades for decades. Steady improvements in education and economic growth over the years have encouraged a communal demand for a better quality of life—an effort the local governments are working hard to accommodate.
As the Asia-Pacific enjoys a healthy gross domestic product growth rate of over eight percent, those efforts are being steamrolled by China and the US, pouring in a total aid of approximately $500 million annually. That's good news for construction and power infrastructure companies, reaping the rewards of a drive towards modernization in new investment areas of the world.
“Funding from various Western governments and development agencies, combined with ongoing economic development in these countries, is driving the infrastructure modernization effort,” says Gregg Pollack, CFO of Pernix Group, Inc., a US-based company that has overseen an extensive and growing portfolio of projects in the region. “This includes not only electrification, but also water/sewage, roads, bridges and other infrastructure.”
As one of its own customers, the US State Department has provided references and helped Pernix develop relationships with the right people in these new markets.
“The US State Department is a repeat and satisfied customer of Pernix, which has enhanced our ability to collaborate with the Department and US embassies around the globe,” says Pollack. “The Department can also introduce us to other US companies doing business or considering doing business in the area.”
Although Pernix enjoys a mix of both domestic and international business in two operating segments (construction and power), the company's proven reputation overseas has set a high standard.
Word to the wise: knowing and understanding the local political landscape is a critical component of the process. There are several challenges for outside companies to overcome that are key to securing competitive contracts, including: implementing the latest technological advances, being mindful of worker safety, being sensitive to environmental issues and maintaining positive relations with the local community, including hiring and training as many local workers and subcontractors as possible.
“Having a professional team and strategic partners that know how to work in these remote areas is one of our advantages – experience and agility enable us to succeed where others wouldn’t even venture to go,” says Pollack.
The company's power infrastructure projects include the complete operation of an electrical utility on the island of Espiritu Santo in Vanuatu, an asset potentially worth up to $3 million per year for the next 20 years. That operation includes the generation, transmission, distribution, billing, collections, customer services, construction of extensions and new capacity, and the maintenance and repair of generation assets such as diesel and hydro power.
In Tinian in the Northern Mariana Islands, Pernix has built a $32 million, 20-megawatt power plant for the local utility on a Build, Own, Operate and Transfer (BOOT) arrangement. In Fiji, the company operates the two largest diesel-fired power plants with total capacity of 72-megawatts on a long-term basis, having supplied and installed 32-megawatts of the total capacity.
Forging ahead, Pernix is also enhancing renewable energy opportunities in the market, with the operation of a hydro facility in Vanuatu and evaluations of solar projects soon to come to several markets. Whether it’s through electrification or construction, all the work Pernix has achieved in the South Pacific region has tremendously benefited the local population. This new trend in the globalization of power is helping to advance communities in the developing world, creating jobs and sweeping infrastructure upgrades in the process.
“Companies like Pernix are critical to achieving the infrastructure development goals of the advancing communities,” concludes Pollack. “We provide the knowledge, experience, capital, training and organizational skills to help them modernize their economies and then maintain their upgraded power, sewage and transportation infrastructure. We believe we have been one of the pioneers in this market, and we hope to continue to play a major role in this modernization effort.”
Trafigura and Yara International explore clean ammonia usage
Reducing shipping emissions is a vital component of the fight against global climate change, yet Greenhouse Gas emissions from the global maritime sector are increasing - and at odds with the IMO's strategy to cut absolute emissions by at least 50% by 2050.
How more than 70,000 ships can decrease their reliance on carbon-based sources is one of transport's most pressing decarbonisation challenges.
Yara and Trafigura intend to collaborate on initiatives that will establish themselves in the clean ammonia value chain. Under the MoU announced today, Trafigura and Yara intend to work together in the following areas:
- The supply of clean ammonia by Yara to Trafigura Group companies
- Exploration of joint R&D initiatives for clean ammonia application as a marine fuel
- Development of new clean ammonia assets including marine fuel infrastructure and market opportunities
Magnus Krogh Ankarstrand, President of Yara Clean Ammonia, said the agreement is a good example of cross-industry collaboration to develop and promote zero-emission fuel in the form of clean ammonia for the shipping industry. "Building clean ammonia value chains is critical to facilitate the transition to zero emission fuels by enabling the hydrogen economy – not least within trade and distribution where both Yara and Trafigura have leading capabilities. Demand and supply of clean ammonia need to be developed in tandem," he said.
There is a growing consensus that hydrogen-based fuels will ultimately be the shipping fuels of the future, but clear and comprehensive regulation is essential, according to Jose Maria Larocca, Executive Director and Co-Head of Oil Trading for Trafigura.
Ammonia has a number of properties that require "further investigation," according to Wartsila. "It ignites and burns poorly compared to other fuels and is toxic and corrosive, making safe handling and storage important. Burning ammonia could also lead to higher NOx emissions unless controlled either by aftertreatment or by optimising the combustion process," it notes.
Trafigura has co-sponsored the R&D of MAN Energy Solutions’ ammonia-fuelled engine for maritime vessels, has performed in-depth studies of transport fuels with reduced greenhouse gas emissions, and has published a white paper on the need for a global carbon levy for shipping fuels to be introduced by International Maritime Organization.
Oslo-based Yara produces roughly 8.5 million tonnes of ammonia annually and employs a fleet of 11 ammonia carriers, including 5 fully owned ships, and owns 18 marine ammonia terminals with 580 kt of storage capacity – enabling it to produce and deliver ammonia across the globe.
It recently established a new clean ammonia unit to capture growth opportunities in emission-free fuel for shipping and power, carbon-free fertilizer and ammonia for industrial applications.