DIFFICULT market conditions are being cited as the reason that South Hook LNG has put plans for a proposed combined heat and power plant in Milford Haven on hold.

Following the completion of ground works, shareholders met last week to make a decision on beginning the construction stage of the project, located inside the South Hook LNG site.

A spokesperson for South Hook CHP Limited said: “I can confirm that the Board of Directors of South Hook CHP Limited determined that, in the light of current market conditions, the decision regarding proceeding with the construction of the proposed South Hook combined heat and power (CHP) plant near Milford Haven, Pembrokeshire will be deferred and the Project placed on hold. Development work will be brought to minimum levels required to maintain the integrity of the work done to date and allow the timely and efficient restart of development if required.”

Speaking on behalf of the Shareholders, Nasser Al Jaidah (Chief Executive Officer, Qatar Petroleum International) said: “The decision to place the Project on hold and to defer the investment decision on the South Hook CHP Project was a difficult one for the shareholders to make and reflects the fact that in the light of today’s market conditions all discretionary major investments have to be rigorously appraised. The decision is in no way a reflection on the attractiveness of the South Hook CHP Project itself, the UK as a place to invest or the support we have received for the Project from government and other stakeholders at the national, regional or local level.”

Speaking on behalf of the Shareholders, Nasser Al Jaidah (Chief Executive Officer, Qatar Petroleum International) said: “The decision to place the Project on hold and to defer the investment decision on the South Hook CHP Project was a difficult one for the shareholders to make and reflects the fact that in the light of today’s market conditions all discretionary major investments have to be rigorously appraised. The decision is in no way a reflection on the attractiveness of the South Hook CHP Project itself, the UK as a place to invest or the support we have received for the Project from government and other stakeholders at the national, regional or local level.”

Stephen Crabb MP said: “This is very disappointing news. The construction of the South Hook CHP project would have been a real boost for the local economy. Unfortunately, with the recent collapse in world energy prices, the shareholders of SHCP have had to look again at their planned investments.”

“South Hook CHP have invested considerable effort in bringing the proposals to this point and I am hopeful that this decision will be reviewed again when market conditions change.”

Cllr Paul Miller also spoke of his disappointment. The Labour parliamentary candidate told The Herald: “The news that the South Hook CHP Project is to be put on hold is yet another blow for our county. Murco closing was a body blow but the short term construction jobs the CHP project could have brought – right now when Pembrokeshire jobs are disappearing fast – will be really missed.”

Artist’s impression of the shelved project

QPI Global Ventures Limited, ExxonMobil Power Limited and Elf Petroleum UK Limited announced in 2012 that they were considering building a combined heat and power (CHP) plant within the boundary of the South Hook Liquefied Natural Gas (LNG) Terminal near Milford Haven, Pembrokeshire. An opportunity was identified to provide high-efficiency, low carbon energy to the UK by building a CHP plant adjacent to the existing LNG Terminal. The CHP plant would make highly efficient use of the heat it produces through an innovative integrated design. All the power generated by the CHP plant would be either used to replace power currently imported by the South Hook LNG Terminal or exported to the electricity grid.