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AmSam trending toward use of LPG for energy needs

As the cost of electricity continues to rise due to the hike in global oil prices, there is a new trend in American Samoa with customers switching to the use of liquid petroleum gas, or LPG, which is provided in the territory by Origin Energy, according to the comprehensive assessment report for the territory, ‘Addressing the Threat of Long-Term Energy Supply Disruption: A strategic Energy Assurance Plan for American Samoa’.

Prepared by Arizona based Westmoreland Associates, the report provides inside information on LPG. The report says that LPG in the form of butane is imported for a variety of commercial residential and industrial uses in the territory. It states that butane is a colorless, flammable hydrocarbon with an empirical formula C4H10.

It has the odor of a natural gas, is extremely stable, has no corrosive action to metal, is slightly soluble in water and readily soluble in alcohol, ether and chloroform. Butane is a gas but is easily liquefied under pressure, which makes it easy to transport. “The hazards of butane are that it has a dangerous fire and explosion risk,” the report states.

Origin Energy imports and sells LPG in American Samoa and the LPG is supplied from Australia by Origin itself, which has conventional oil and gas reserves in the Cooper Basin of South Australia and Queensland.

LPG is also sometimes sourced from areas such as Indonesia and surrounding waters, Malaysia, the U.S., South America and West Africa. 

Origin Energy reports a throughput (sales) of 1,600 tons of Butane in 2010, with monthly sales averaging between 125 and 135 tons, according to the assessment report.

A footnote in the report states that as of April 2011 the company had 111 commercial customers with credit accounts plus an unnumbered amount who purchase LPG on a cash basis. Also as of April 2011, the company reported a total of 7,292 domestic customers, including StarKist Samoa.

As ASPA electricity rates rise with the global price of oil and the adjusted maximum allowable price (MAP), some fuel switching is occurring from electricity to LPG, the report points out.

“Origin Energy estimates a cost savings of as much as 37% when LPG is used for cooking compared to electricity — at 2011 electricity prices,” according to the report based on an Apr. 25, 2011 communication from Origin Energy’s Richard Young.

The report went explains that end-uses for LPG range from running equipment (fork lifts at the cannery) to home cooking and water heating.

Relative consumption as a percentage of the 1,600 tons sold in 2010 can be broken down as: domestic – 35%; commercial – 35%; and industrial – 30%.

“Origin Energy anticipates that the American Samoa Government may, in the future, be procuring LPG for uses not now served by Origin such as high school chemistry labs, home economics classes and cooking for school lunch programs,” the report says.

For safety reasons, the infrastructure involved in importing and storing LPG butane is located separately from the bulk petroleum terminal in Utulei. The main LPG butane infrastructure consists of storage tanks in the village of Aua.

As to resupplying LPG, the report says it occurs every six to eight weeks. From the time an order is placed, the re-supply vessel takes between 6-10 days to reach Pago Pago from Australia.