Apr 2004 Financial News

Trinidad and Tobago seeks out partners for fifth LNG train

Apr 14, 2004

Curtis Williams
OGJ Correspondent

PORT OF SPAIN, Apr. 12 -- Atlantic LNG (ALNG) partners have begun construction of a fifth LNG train in Trinidad and Tobago, although the consortium's members will differ from those that now own ALNG's existing three trains as well as the 800 MMcfd fourth train, now under construction.

The Caribbean island's Prime Minister Patrick Manning said his administration had already asked all international companies that may have natural gas and want to build an LNG plant in Trinidad and Tobago to approach his government for negotiations and indicate what gas they have available.

"We are already working on Train 5 and what we have done, we have asked all persons who have an interest in participating in an LNG plant in Trinidad and Tobago to make that interest known and to let us know how much gas you can bring to the table," Manning said.

The government's initiative, Manning said, ". . .is part of the strategy to open up the playing field and ensure that we have the best deal possible. As a result it is clear that the consortium will look significantly different from the past four trains."

Currently, ALNG's four trains are owned by a consortium comprising Repsol-YPF SA, BP Trinidad & Tobago LLC, British Gas, National Gas Co. of Trinidad & Tobago, Tractabel SA, and Cabot LNG.

Atlantic LNG is the largest exporter to the most lucrative LNG market in the world, accounting for nearly 70% of the total LNG imports into the US.

Potential participants
The Prime Minister's announcement opens the doors to several companies to participate in the developing LNG market, including Venezuela's state-owned Petroleos de Venezuela SA (PDVSA), EOG Resources Inc., ChevronTexaco Corp., and BHP Billiton.

BG, which is the second-largest shareholder in all the LNG trains, has said it is pleased with the present ownership structure and does not see a need to change it.

"BG, and its partners, would of course consider potential expansion opportunities at the Atlantic facility. We are however perfectly happy with the existing arrangement regarding ownership, and are unaware of any formal request from any stakeholder to change what is currently in place," BG spokesman Carter Christopher said.

Highly placed sources in the Trinidad and Tobago cabinet say the government is committed to changing the ownership structure because it believes a way must be found for PDVSA to have a stake in and LNG plant in Trinidad in return for use of Venezuelan gas from the Deltana area which straddles the border with Trinidad and Tobago.

Sources say this is crucial in order to assist the Venezuelan government to sell the idea of having their gas processed in Trinidad and Tobago and also to meet the terms of the letter of intent signed between the two countries that commit Venezuelan gas to be processed in Trinidad and Tobago.

There also is the concern that the Trinidad and Tobago reserves-to-production ration is becoming tight and the island's desire is growing to use some of its gas reserves for other industries, rather than exporting it as LNG.

EOG Resources openly expressing a desire to get into the LNG market, while BHP Billiton will eventually have to find a market for its 2.5 tcf of gas in its Angostura field.

Source: Oil and Gas Journal
http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=Prong&ARTICLE_ID=202499