If all goes as planned, Grand Cayman’s propane fuel supplier that has enjoyed a monopoly for more than a half century will have competition by the end of this year.
Clean Gas Ltd. announced last week that it had submitted a planning application for a bulk storage facility capable of holding up to 300,000 gallons of propane fuel in Grand Cayman’s Industrial Park, off Sparkys Drive.
The initial investors of the company include businessmen Randy Merren and Marcus Cumber, attorney James Bergstrom and Minister of Financial Services Wayne Panton.
“For us, it’s about giving a choice to consumers in the Cayman Islands,” Mr. Cumber said, adding that while starting a business in competition with the long-established sole provider of propane carries some risk, it was a risk he and his partners were willing to take.
“We have four like-minded Caymanians that see an opportunity in this particular market,” he said. “We felt that with the growth of [Cayman’s] economy that there was room for a new provider to enter the market. There’s a risk we might get kicked … but from a redundancy standpoint, it’s good to have competition.”
Mr. Cumber said that although Home Gas – the current sole supplier of propane on Grand Cayman – will have a competitive advantage because the direct underground pipeline between the Sol Petroleum terminal on South Church Street and its facility on Walkers Road eliminates transportation costs, there is still enough profit margin to supply propane at a lower price. This, he believes, will have positive effects for Grand Cayman’s businesses and public.
“When we saw Digicel enter the market against Cable & Wireless, telecom prices dropped significantly, and they’re still dropping,” he said, adding that the same thing will happen with propane fuel. “You will see that before we even open our doors prices will come down.”
Clean Gas will service residential, industrial and commercial accounts, and perhaps even the small tanks provided at gasoline stations, Mr. Cumber said. It will not, however, enter the propane appliance market. “We just want to be a supplier and we just want to bring the price down,” he said.
Because propane burns cleaner with less carbon emissions than other fuels, if it is made more affordable, Mr. Cumber said he believes more people would “go green” and use propane appliances and maybe even vehicles.
Assuming planning approval is granted, Mr. Cumber said the build-out of the headquarters and storage facility would be fairly simple, allowing for a fast start up before the end of the year. He said Clean Gas has already lined-up its distribution supplier in the United States.
Mr. Cumber also said it was estimated that Clean Gas would employ seven direct jobs on Grand Cayman, positions that he is confident Caymanians can fill.
“Clean Gas aims to establish a positive, lasting relationship with our community,” he said. “Up until now, there’s only been one provider serving the community. Now, consumers will reap the rewards of being able to choose between the two options in the market.”