Dec 2016 Financial News

PM: NGC will find $$ to fund Dragon gas deal

Dec 07, 2016

This country’s new gas deal with Venezuela is likely to cost hundreds of millions of US dollars. However, Prime Minister Dr Keith Rowley says Trinidad and Tobago can afford it.

The PM and Venezuelan President Nicolas Maduro signed off on the deal at the Palacio de Miraflores in Caracas on Monday. While no details were revealed in Caracas, Rowley told Government ministers and energy officials from both countries that the deal was “significant and necessary for the commercialisation of the hydrocarbon sector which will have far reaching consequences for the people of Venezuela and Trinidad and Tobago.”

After a seven-hour stay in Caracas, Rowley and his contingent, comprising Cabinet ministers, officials from state-owned National Gas Company (NGC), energy advisers and local journalists, returned on a chartered Caribbean Airlines plane.

At Piarco International Airport, Rowley explained that unlike the Loran/Manatee agreement, this “across the border” deal allows T&T to access gas reserves in Venezuelan waters under the full sovereignty of Venezuela. The agreement facilitates a pipeline from the Dragon gas field in Venezuela’s Marisal Sucre region to Trinidad’s Hibiscus platform. Rowley said this means that Trinidad will have to fund the construction of a pipeline from Venezuelan waters to the Hibiscus platform located in the north western region of Trinidad.

He said: “It says in the agreement that all parties will bear their own costs.”

Asked by journalists if T&T was in a position to afford it, the PM made it clear that NGC will find the money to construct the crucial pipeline which will allow Trinidad access to Venezuela’s Dragon gas field.

He said over the years NGC had built a significant pool of capital for projects like the Dragon Field. However, he admitted that NGC’s pool of funds was largely consumed by the need to pay out dividends to fund T&T’s national budgets.

“So now that the NGC has had to do this, the capital will have to come from the Government or from what little NGC has left,” Rowley said.

He suggested that NGC would have to look at its ability to borrow or even consider a partnership to fund the construction of the pipeline.

“I don’t want to speak for Shell, but the capital is not an impediment to the project’s existence,” he said.

Shell, he said, played a major role in the Dragon gas field deal. Not only did it partner with NGC, but Shell helped to fast track finalisation of the deal.

While Shell has an interest in Atlantic LNG, he disclosed that it also owns the Hibiscus platform, which he hopes will start receiving gas before the year 2020.

Asked if he was worried about how the United States will react to T&T’s deal with Venezuela, the PM said: “I’m sure the US being our major trading partner would wish us well in any venture we undertake with any other country. T&T is at peace with all, especially at Christmas time.”

Source:
RIA RAMBALLY
CNC3 News
Trinidad Guardian
Wednesday December 7, 2016

http://www.guardian.co.tt/news/2016-12-06/pm-ngc-will-find-fund-dragon-gas-deal