By Prior Beharry
IN an unprecedented move, the Government of Trinidad and Tobago has negotiated with Shell and bp to enhance its stake in the Atlantic LNG Company of Trinidad and Tobago (Atlantic).
Prime Minister Dr Keith Rowley said multinational corporations do have a heart at the commemoration signing for the new Unitised Commercial Structure between Atlantic and state-owned National Gad Company (NGC) and Shell and bp in London on Tuesday.
He said it was “near impossible to dream that we could bring bp and Shell and NGC together for the purpose of becoming a better unit and also for increasing the value which would accrue to the people of T&T.”
T&T to Get % in Atlantic Trains 2 and 3
The Point Fortin Atlantic plant produces liquefied natural gas (LNG) from natural gas delivered from fields in and around Trinidad and Tobago. It is a four-train liquefaction facility that exports LNG to all parts of the world. Due to a shortage of natural gas produced in T&T, Train 1 has been offline for more than two years. T&T through the National Gas Company (NGC) had a 10% stake in it with Shell having 51% and BP 39%. Shell and BP both own Trains 2 and 3 with each having 57.5% and 42.5% ownership respectively. In Train 4, the largest of all, Shell has 51.11%, BP 37.78% and NGC 11.11%. It was still uncertain what was percentage NGC now has.
Speaking at a press conference two weeks ago, Dr Rowley had said, “Our efforts largely as a result of the number of high-level meetings we had with Shell and BP, which has brought us billions of additional dollars in the existing contracts.”
Dr Rowley some felt that the contracts at Atlantic were “set in stone” but “we did not believe that.” Negotiations for this restructuring began in 2018 and was supposed to be concluded in March this year.
On Tuesday, Dr Rowley said, “It was a fit of madness to think we could have done this but as I read it, I realised it was doable and we did it.”
Energy insiders said it was unprecedented for multinational energy companies to re-negotiate fixed contracts with a government and to give it a bigger stake.
In a release, bpTT president David Campbell said, “bp welcomes the new structure for Atlantic LNG which has come as a result of close collaboration with all stakeholders.
“The new structure will benefit both the Government of Trinidad and Tobago as well as Atlantic’s shareholders. For bp, the new structure sets a strong foundation for future investment in T&T’s energy industry, including the deepwater.”
EVP G&LCE Anja-Isabel Dotzenrath said, “I congratulate the Government of Trinidad and Tobago, my colleagues at bpTT and fellow shareholders on concluding negotiations for the restructuring of Atlantic LNG.
“T&T is an excellent example of meeting the world’s developing energy needs and the new structure for Atlantic will help to maintain momentum in the country’s energy sector.”
BPTT stated that the highlights of the new structure included:
- The National Gas Company (NGC) will increase its equity share in Atlantic LNG, consistent with the commitment by the Government to maximise value to the country from the sale of hydrocarbon resources;
- The new structure will also facilitate a market-reflective pricing mechanism that provides fair value from the sale of LNG for both the country and the shareholders;
- The restructured ownership and commercial framework will allow for an intensified focus on operational efficiency and reliability of Atlantic; and
- For investors, it will provide the certainty required for sanctioning the next wave of upstream gas projects.
See related story below:
T&T to Get % in Atlantic Trains 2 and 3
