Atlantic LNG restructuring deal open doors for gas sector

Unitised liquefaction trains could facilitate investment and provide third party access to boost feedstock

13 December 2022

Gareth Chetwynd in London

Partners in the Atlantic LNG project agreed to restructure ownership in a deal that will create a single commercial structure and increase equity of state-owned National Gas Company (NGC) across the liquefaction trains. In the restructuring, during four years of negotiations, NGC took shares in all of the facility’s four trains, allowing for a unitised business model and, crucially, opening the door to third party access. Previously NGC had shares in just two of Atlantic LNG’s trains. Only three of the four trains are currently active as operation of Train 1 was suspended in late 2020 due to a shortfall in natural gas reserves in Trinidad & Tobago.

UK supermajors BP and Shell remain as owners of the three active liquefaction trains but reduced their equity in two of them to make way for NGC.

“After years of discussions, negotiations and dialogue we are here to sign agreements that will create a simplified commercial structure for the Atlantic LNG venture,” said Shell country chair Eugene Okpere at a signing ceremony.

The simplified structure to the Atlantic LNG business would help unlock about $5 billion of upstream investment in the country through 2026. With an appalling record of failure at Petrotrin and Train 1, state breaucrats remain in control of energy. Investors share grave reservations that the new structure would allow the government to take a more active role in the commercial arrangements for marketing LNG, especially on new fields such as Manatee.

“At present, we have several upstream projects either with the (Atlantic LNG) shareholders or third parties which are awaiting final investment decision. If we are to make this project a success we need to bring these upstream projects on stream and accessible to the restructured (Atlantic LNG) facility.”

Both Shell and BP have invested steadily in Trinidad & Tobago’s upstream sector in recent years.

BP started up gas production from its Cassia C offshore compression platform, its biggest offshore facility in the country, facilitating the exploitation of low pressure gas resources from the Greater Cassia Area. BP’s Trinidad president David Campbell said the restructuring agreement will make the pricing of Atlantic LNG more responsive to markets and make investments more efficient. BP’s plans for 2023 include a seven-well subsea tie-back for the Cypre development and, over the longer term, it is interested in sanctioning development of the Ginger and Coconut discoveries.

BP is in ongoing negotiations over acquiring new deep-water acreage following a bid round earlier this year.

Third party access
The provisions on third party access, although lacking in detail, could attract new gas reserves to the Atlantic LNG facility.

Possible sources include offshore gas straddling the maritime border with Venezuela or reserves entirely within Venezuelan territory, should both sides want to opt for a monetisation route through Atlantic LNG. The two countries in 2019 signed a binational agreement, agreeing to export gas from the shallow-water Dragon field across the maritime border to the Shell-operated Hibiscus field, about 23 kilometres away.

Dragon, which has completed subsea wells in place, was expected to send initial volumes of between 200 million and 300 million cubic feet of gas per day to Hibiscus, from where it could be help replenish feedstocks for Atlantic LNG. However, the scheme was paused when the US stepped up its sanctions against Venezuela over disputed elections there.

Similarly, the Loran field, which straddles the maritime border with the Shell-operated Manatee field in Trinidad waters, is a prime candidate for fast-tracking via an export system to Trinidad & Tobago.

Trinidad last year granted a 25-year production sharing contract for the Manatee field as a result of the government-to-government agreement to allow development and marketing arrangements in which gas to the domestic market would be via NGC and exports via the Atlantic LNG facilities.

Just over a quarter of the 10 trillion cubic feet of gas reserves on Loran-Manatee lie on the Trinidad & Tobago side of the maritime border.

The restructuring agreement might bring the final investment decision closer, now that US sanctions are easing.

NGC president Mark Loquan, said “It is expected that with the completion of the Atlantic restructuring exercise, focus can now be placed on investment decisions to pursue development projects such as Manatee and the deep-water acreage that will hopefully bring more gas into the system, With Atlantic’s future made more secure by this restructuring, we hope to see more development activity, which ultimately boosts gas availability and long-term sustainability for the local gas industry.”

Industry insiders regard the mention of third party access as a potential game changer that could facilitate a monetisation route for Australia’s Woodside Energy to develop gas resources obtained from the acquisition of BHP’s oil and gas assets, including the Calypso discovery.

Atlantic rigmarole – exciting times for energy sector?

Dec 07 2022

Prime Minister, Dr Keith Rowley witnessed Shell T&T senior vice president and country chair, Eugene Okpere, left, National Gas Company president, Mark Loquan, Minister of Energy and Energy Industries and Minister in the Office of the Prime Minister, Stuart Young, and bpTT president, David Campbell, signed the agreement for restructuring of Atlantic LNG  at the Securing Our Energy Future, Signing Ceremony.

Major energy players agreed that the simplified Atlantic LNG commercial structure will enable the freeing-up of resources, to focus on increasing operational efficiency and reliability. Eugene Okpere, senior vice-president and country chair, Shell T&T Ltd said this new framework is critical for the long-term sustainability of T&T’s gas value chain as it provides a higher level of commercial certainty, to underpin multi-billion-dollar investments in the upstream.

“It will enable and support the competitiveness of gas supply projects in the medium and longer term, like Shell’s Manatee project which is one of the largest undeveloped natural gas fields in the country,” Okpere explained as he and other Atlantic shareholders were present at the signing ceremony of the commercial term sheets for the restructuring of Atlantic LNG.

In 2018, the context for the energy industry was undergoing a fundamental change and discussions with the major players in the local industry led to a simplified Atlantic LNG value chain. The simplified commercial structure will enable the freeing up of resources, to focus on increasing operational efficiency and reliability. As the world transitions to a lower carbon energy future, LNG will continue to play a significant role in developing new markets for gas and supporting the switch away from coal-intensive energy systems.

Shell has been a pioneer in LNG for over 50 years and is a world leading LNG trader, delivering cargoes to over 25 countries.

“Atlantic LNG plays an important role in the global Shell portfolio as we contribute to fulfilling the energy needs of the local and international markets,” Okpere added.

The National Gas Company (NGC) increased its shareholding in the simplified Atlantic LNG thereby enhancing derived benefit for T&T.
Discussions around the ideal commercial and ownership structure for the Atlantic facility however, have been protracted, not just because of the complexity of existing arrangements, but because it was imperative to get it right, NGC’s president Mark Loquan said.

“We needed to land on an agreement that considered the interests of all stakeholders along the natural gas value chain and although the multi-party process was, at times, arduous, complex and time consuming.”

To understand the importance of the signing, Loquan also contextualised Atlantic’s business in both the national and global economy.

“In T&T, a large fraction of the value that we generate from our gas derives from the LNG business. It stands to reason that the strength of our economy is tied to the health of that industry. Having an optimal commercial structure for Atlantic will help streamline our LNG business, and in the process, reinforce that pillar of our national economy. In T&T, a large fraction of the value that we generate from our gas derives from the LNG business. It stands to reason that the strength of our economy is tied to the health of that industry,” Loquan said.

Having an optimal commercial structure for Atlantic, will help streamline the country’s LNG business, and in the process, reinforce that pillar of the national economy. Loquan expected that with the completion of the Atlantic restructuring exercise, focus can now be placed on investment decisions to pursue development projects such as Manatee and the deepwater acreage that will hopefully bring more gas into the system.

“With Atlantic’s future made more secure by this restructuring, we hope to see more development activity, which ultimately boosts gas availability and long-term sustainability for the local gas industry.”

The NGC Group is also spearheading a number of clean energy initiatives as part of its Green Agenda.

Since natural gas is recognised as a critical fuel for the energy transition, LNG is a top tier solution in its suite of carbon mitigation strategies.

Loquan said NGC is confident that the restructuring of Atlantic will allow the company to better serve its growing markets, possibly increase its equity stake in the business, and strengthen its support of global decarbonisation efforts through LNG.

Atlantic continues to play an important role as a global supplier of LNG as in 2021, according to bpTT’s statistical review of world energy markets, LNG cargoes from Atlantic made their way to 18 countries overseas. For bpTT, the signing of these agreements is very timely.

David Campbell, bpTT’s president said, “We have just taken a final investment decision on our next gas development Cypre and we have a series of future potential gas developments and interest in progressing deepwater exploration and production.

“These commercial terms will support our ability to compete for capital within bpTT to further our investments in T&T. This is an exciting time for the T&T energy sector and we at bp are proud to play our part in securing T&T’s energy future,” Campbell said.

He added that clarity of commercial terms will be important to support continued investment in the upstream and the sanction of the next wave of upstream gas projects.

While the agreement is important there is a wider message, the importance of collaboration, Campbell acknowledged.

“Although my time in T&T has not been very long, what is clear to me is that there is a commitment to collaboration on the development of T&T’s energy sector, and this agreement–in fact the negotiating process–is a clear demonstration of that commitment,” he noted.

In March 2019, the shareholders of Atlantic LNG signed a letter of intent affirming their willingness to agree to discuss with Government the restructuring of Atlantic LNG. In April 2020, the shareholders submitted a proposal to Government to commence negotiations on a Heads of Agreement which was to be followed by definitive agreements. Following intensive negotiations agreement was reached on a Heads of Agreement (HOA). On January 25, 2022 the Government and Atlantic LNG Shareholders signed the HOA that outlined the governing principles referred to as the Government principles that will form the basis of the definitive restructuring agreements for the restructuring of Atlantic LNG.

The HOA represented a commitment by all parties to commit to enter into good faith negotiations regarding the restructuring of the Atlantic facility into a unitized model with a common ownership structure and a commercial framework for gas supply and offtake.

The HOA also outlined the Government principles which formed the guidelines of the negotiations that took place over the last 11 months.

Atlantic LNG’s Train 1 Still Offline after 18 Months

Discussions between the government and key shareholders have yet to resolve an impasse about a potential restructuring to benefit all parties. ( Atlantic LNG)

Atlantic LNG Point Fortin. Shell and bpTT with renewed contracts for train one until 2024 re-negotiated their existing contracts to realise supplies which are currently lacking.

Atlantic LNG proceeds on single train

8 DECEMBER 2022

The restructuring shareholders agreement for Atlantic LNG (ALNG) is expected to merge all four trains as a single entity at the Point Fortin facility, the National Gas Company (NGC) has disclosed. This will include Train 1, which has been offline since December 2020.

After the singing of a heads of agreement with ALNG shareholders – NGC, bpTT and Shell Trinidad and the Energy Minister, Stuart Young, –

NGC president Mark Loquan was asked “how does NGC benefit from this new restructuring?” and “What does the new arrangements mean for Train 1?”

Through its corporate communications personnel, NGC responded: “We see the ALNG restructuring as hinged to upstream development which would benefit the energy sector over the medium to long term. NGC share of ownership was 10 per cent in Train 1 and 11.1 per cent in Train 4. Once all the trains are merged into a single commercial entity, NGC would benefit from increased equity across the unitised entity.”

Asked again: “Just to clarify a “unitised entity” suggests that all the trains may be merged into one…” is that a fair assessment?”

NGC responded saying that it was a “fair assessment.” It added that Train 1 is still non-operational.

 

‘Historic’ restructuring of ALNG

The signing of the amended and restated heads of agreement (HoA)between the Government and shareholders in ALNG was marked as historic by stakeholders at the signing ceremony.

“After years of discussions, negotiations and dialogue we are here to sign agreements that will create a simplified commercial structure for the Atlantic LNG venture,” said Eugene Okpere, Shell Trinidad country chairman.

Noting that for the past three years covid19 and the Russian war have brought about uncertainty and volatility in the global energy markets, Okpere said more uncertainty is expected as TT continues to find a balance between energy transition and providing clean, secure and affordable energy to meet the people’s demands.

The Prime Minister explained at the ceremony that discussions on ALNG’s restructuring started in 2018 with Government starting the negotiations with bpTT and ShellTT. In March 2019, shareholders signed a letter of intent affirming their willingness to discuss the restructure of ALNG. The Government and shareholders signed a heads of agreement, earlier on January 25 which outlined the governing principles that would form the basis of the final agreement. The HoA was amended and restated on Tuesday with agreed terms of the final definitive restructuring agreement. After the stakeholders settle “complex and extensive legal documents.” The final agreement would be presented by March 31, next year.

The HOA represented the commitment of all parties involved to restructure the ALNG facility into a “unitised model” with a common ownership structure, a commercial framework for gas supply and the transitioning of the ALNG facility into a single, unitised facility.

“These negotiations are unprecedented. This has not happened anywhere in the world before.”

Loquan said NGC was satisfied with being part of the process. Discussions around the best commercial and ownership structure of the ALNG facility was a slow process, not just because of how complex the existing arrangement was but because it was imperative that the parties involved got it right.

“We needed to land on an agreement that considered the interests of all stakeholders along the natural gas value chain and although the multi-party process was arduous, complex and time-consuming, I am sure that all shareholders would agree that the eventual outcome augurs well for our shared vision for ALNG to operate at a world-class level,” Loquan said.

Aside from unitising the facility and reorganising the governance structure and shareholdings of ALNG, the restructuring agreement would also see a greater input made by the Government with regard to marketing content from ALNG.

Train 1 woes
Between 1999 and 2005 ALNG tripled its capacity with Trains 2 and 3. It then added almost double Train 1’s capacity with the construction of Train 4. The four trains’ overall capacity stands at 15 mpta (million tons per annum) of LNG.

Train 1 which started commercial operations in 1999 has a capacity of 3 mpta of LNG and 6,000 bpd (barrels per day) of natural gas liquids (NGLs). ALNG’s shareholding in Train 1 is: NGC – 10 per cent, bpTT – 34 per cent, Shell TT – 46 per cent, and the Chinese Investment Corporation – 10 per cent.

Trains 2 and 3 have a capacity of 3.3 mpta of LNG and 6,000 bpd of NGLs each. The trains supply about 12,000 barrels of NGLs to Phoenix Park Gas Processors (PPGPL). Shell TT owns 57.5 per cent and bpTT 42.5 per cent.

Train 4, which was considered the largest of its kind in the world when it was constructed in 2005, has a capacity of 5.2 million tons of LNG per annum. It also has the capacity to move 12,000 barrels per day of NGLs to supply PPGPL. NGC has an 11.1 per cent ownership in Train 4, Shell – 51.1 per cent and bpTT – 37.78 per cent.

In 2020, Train 1 was closed, with upstream gas supply commitments that were more than the downstream demand given possible plant shutdowns, reduced industrial activity and fears of multiple waves of covid19. Government stubbornly invested over $230 million to ensure that the facility was in a state of readiness and safe to operate should the supply of gas improve.

ALNG currently operates without the input of Train 1, which accounted for about 20 per cent of ALNG’s capacity. According to the Energy Ministry’s consolidated monthly reports, ALNG’s production of LNG stood at 485,662,250 mmbtu for January to September 2019. For the same period in 2022, ALNG produced 310,620,369 mmbtu.

 

 

Trinidad, Shell, BP advance with Atlantic LNG restructuring

LNG Prime Staff
December 7, 2022

Trinidad and Tobago signed a restructuring deal with the shareholders of LNG producer Atlantic LNG, including Shell and BP.

The energy ministry signed the deal with representatives of Shell and BP and the National Gas Company of Trinidad and Tobago (NGC). The parties signed the amended and restated heads of agreement on the restructuring of the Atlantic LNG facility into a single unitized facility. Trinidad signed bilateral heads of agreement with BPTT and Shell on the restructuring of Atlantic LNG.

These agreements indicate that the government and the shareholders consented to the commercial terms of a restructured Atlantic LNG. The parties would now work on binding definitive restructuring agreements which are projected to be executed by March 31, 2023. The deal follows a heads of agreement agreed earlier this year between the parties. The government and partners in the facility have been in talks for about four years to find solutions to ensure the future supply to the facility and to simplify the shareholding structure.

The Point Fortin facility features four trains with a total capacity of about 15 million tonnes per annum of LNG. The facility experienced supply issues due to dwindling domestic gas reserves. Shell and BP have the majority stakes in Atlantic LNG trains, followed by NGC and Chinese Investment Corporation (CIC). PRC owned CIC has a stake in the first train which was shut in 2020 and did not participate in the talks.

New ALNG structure stymied by state share?
The parties agreed on term and conditions of the participation in the new entity, the new shareholding of Atlantic LNG, the commitment to gas supplies for the trains, third party access and other critical commercial arrangements. Industry observers fear the new ALNG structure would be compromised by greater involvement of the state in the supply and marketing of LNG and by a new and enlarged shareholding for NGC in the new Atlantic LNG structure. Details of the new shareholding structure, remain secret, an ominous sign of the corruption plaguing the industry.

According to Reuters, the parties agreed that the first train would remain closed due to a lack of natural gas supply while CIC no longer has a active stake. Did NGC acquire the CIC interest? Shell and BP reduced participation in two trains and NGC now has a shareholding in all four trains, compared to two previously.

 

 

Energy Chamber welcomes Atlantic restructuring

December 06, 2022
The Energy Chamber of Trinidad and Tobago release

The Energy Chamber of Trinidad & Tobago warmly welcomes today’s signing of agreements between bp, Shell, The National Gas Company of Trinidad and Tobago Limited (the Atlantic shareholders) and the Government of Trinidad & Tobago for the restructuring of the Atlantic LNG facility. This announcement that the parties have reached agreement on the commercial terms of the restructuring is a very important milestone to secure the future of the gas industry and therefore the overall economy of Trinidad & Tobago.

Clarity on the ownership and commercial structure of Atlantic and the pricing mechanisms for natural gas exported through the facility are vital for investor confidence. These agreements will assist companies in making investment decisions in new upstream exploration and development, which are also critical for the country’s petrochemical sector. The announced system to allow third-party gas suppliers a route to access the facility will also help spur upstream investment beyond the Atlantic shareholders.

The decision will also allow Atlantic to improve the efficiency of operations and make further investments to decrease the carbon intensity of their LNG.

Securing future gas supply, and a fair return for all stakeholders, is not just important for the upstream, midstream and downstream companies and the Government; it is also important for all of the service companies and contractors who service the industry and all of their employees.

These negotiations have been long and extremely complicated. As the Prime Minister made clear, they are historic and there have been no other examples where this sort of restructuring has taken place. The successful conclusion of these negotiations is testimony to the hard work and commitment of many people in the companies and within the Ministry of Energy and Energy Industries. The success of Trinidad & Tobago in the global gas industry has been based upon finding alignment and win-win outcomes between the Government and energy companies.

We look forward to the completion of the final legal agreements in early 2023.

 

Background to Atlantic Epic

Atlantic LNG’s Train 1 Still Offline after 18 Months

The 4-train Atlantic LNG liquefaction plant continues to operate with three trains as Train 1 remains inoperative. Train 1 which has a 3 million tonnes per annum (mtpa) capacity or 20% of the total installed 14.8 mtpa capacity, initially went offline in December 2020.   20% of the complex’s total installed 14.8capacity, initially went offline in December 2020. 07/26/2022

18 DECEMBER 2021

Energy Minister Stuart Young told parliament that he hopes that some $230/$240 million spent by State-run National Gas Company (NGC) on turnaround and maintenance of Train One of the Atlantic LNG complex could be discussed with other shareholders of the train, in replying to questions from Pointe-a-Pierre MP David Lee on the troubled train. Train One had produced no liquefied natural gas (LNG) in the past year due to gas-supply woes and covid19.    Young said just as the Government was honouring its financial obligations to Train One, so too was optimistic towards other shareholders, namely bpTT, Shell and PRC firm Summer Soca.

“The funding of Train One is a shareholder issue and therefore the shareholders’ position is best sought from them, the shareholders themselves. Suffice it to say, the Government through NGC has honoured and will continue to honour all of its contractual obligations relative to Train One and expects that all other shareholders will continue to do likewise.

“The NGC LNG funding arrangement was terminated by Atlantic effective August 5 and as such Atlantic Train One funding requirements will continue to be in accordance with the Train One agreement.” He said no shareholder has said they would neglect their commitment to the relative funding of Train One for the rest of the year.

Lee asked about roughly $240 million spent, relative to the other shareholders.

Young replied, “NGC expended a sum of money, roughly $230 million for the requisite turnaround and maintenance work to be done to Train One earlier this year.”

He said the sum was a sunk cost used to keep the plant in a state that in could continue to be utilised (although not producing LNG in the past year.)

“We continue to be in discussion with the other shareholders of Atlantic LNG including with respect to Train One.“

He hailed NGC’s $1.085 million after-tax profit for the first nine months of this year, despite the write-off.

“It is expected that this sum of money that was expended will come up and will be dealt within the continuing talks and negotiations we are having with the shareholders.”

Young addressed a report that all shareholders except NGC had declared Train One closed and installed blinds at the plant. He said it important and “nothing unusual” to put blinds on the plant, from an engineering perspective.

Young said he was not a party to the shareholder agreements and could not state their positions.

“However I can confirm Train One has been non-operational in 2021, apart from the turnaround work and the maintenance work. The plant remains de-pressured, isolated and (with) blinds installed to ensure the safety of the train within the Atlantic LNG complex.” He said Trains Two, Three and Four were appendages to the first-built train, and were constructed based on some of the common features of Atlantic Train One. “So while no decision has been taken with respect to the future and how this will be dealt with from an engineering point of view and the works are being done and the costing is being done, it is not unusual for blinds to be installed on the plant in these circumstances.”

 

 

Atlantic LNG Train 1 extinction confirmed

Feb 23 2022

While claiming ongoing negotiations, government finally relinquished Atlantic LNG Train 1 and signed an agreement with Royal Dutch Shell, the National Gas Company and bpTT to unitise trains two, three and four into a single train.

The government had announced the plan for a single LNG train facility and that it had signed a Heads of Agreement (HOA) with the multinationals and the state-owned company, but the terms of the agreement secret. The HOA shows that the government agreed to the three-train facility.

One of its main objectives was “the sustained operation of the unitised facility as a three train facility.”

bpTT and Shell, the two major shareholders in Atlantic LNG confirmed to the NGC that its shareholding in the restructured entity will not be affected by the closure of Train 1.

The Ministry of Energy said, “The Atlantic LNG facility comprises four (4) LNG Trains, each with different shareholder structures and commercial arrangements. It was agreed that the Atlantic LNG facilities would be managed more efficiently if brought under the framework of a single ownership structure.” This implied that the restructuring involved all four trains when it was unable to salvage Train 1.

In the HOA government said it wanted fair and equitable upstream returns and to ensure that value accrues to T&T.

“The ALNG restructuring project shall involve the consolidation of three Atlantic LNG joint ventures into a unitised facility held by one joint venture with a common ownership (the Unitised ALNG) and the commercial framework for gas supply, gas processing, LNG and NGL offtake. The members shall, and shall work with their affiliates to restructure the three Atlantic LNG joint ventures to achieve a common ownership structure in the Unitised ALNG. The partners acknowledge that the final equity structure of the Unitised ALNG will be negotiated as part of the Definitive Restructuring Agreements.”

The HOA is effectively the final closure of Train 1 on which NGC lavished over a quarter billion of tax dollars in a doomed attempt to revive the facility. Train 1 has been shut now for over a year and directors of the company sought protection from being held liable for the losses through an indemnity from corporation sole for substantial financial loss. Prime Minister and the Minister of Energy consistently lied that Train 1 was subject to negotiations but the HOA proves that both know that Train 1 is defunct.

The country thus lost a quarter of its LNG capacity and must adapt long term to lower LNG exports even though the returns per molecule of natural gas could be better depending on the outcome of the final negotiations.

According to the HOA the ALNG Restructuring Project shall be undertaken with appropriate consideration given to the terms and conditions of existing commercial agreements for the Atlantic Facility. It is creating a unitised facility with the new license coming into effect upon the expiry or jointly agreed termination of the existing liquefaction license for the Atlantic facility but does not state how long that license should be for, suggesting that the members will have to provide information to help the Minister determine its duration.

“Members agree to provide any available information as may be reasonably requested by the GORTT to assist in its determination of the length of the new single liquefaction license to be issued.”

The agreement also stated government’s rights in the restructuring.
The relevant Definitive Restructuring Agreement to which the GORTT is a party (for example, the liquefaction license for the unitised facility) shall provide GORTT with access to information regarding the commercial arrangements and operation of the unitised facility sufficient to ensure that the GORTT can monitor and enforce the terms of the Definitive Restructuring Agreement which it is a party.

T&T lost revenue as multinationals fetched significantly higher prices for LNG than payment in net-back pricing to the government through a system of transfer pricing. Neither bpTT nor Royal Dutch Shell acknowledged wrong-doing but paid a couple billion TT dollars to the government in good faith. The Prime Minister admitted that the country lost billions of US dollars in potential revenue from LNG exports and said the Government has been having dialogue to ensure a more equitable sharing of LNG revenues.

“We now have an opportunity to correct this inequality consequent on the pending expiration of LNG licenses and plans to restructure the LNG business in T&T. It is in situations like this that the value of the membership of T&T in the GECF takes on added significance. The experience of the forum which possesses 70 per cent of the world’s proven gas reserves, 44 per cent of its marketed production, 52 per cent of pipeline, and 51 per cent of LNG exports in the world is formidable and can be of immeasurable benefit to members,” Rowley explained.

The HOA agreement also provided for:

Upon the implementation of the ALNG restructuring project the GORTT shall have the right to request and receive information and periodic reports concerning the operation of the unitised the facility to determined through the relevant definitive restructuring agreements regarding the current and planned utilisation of the unitised facility and any projected expenditure in order to maintain a line of sight regarding the unitisation and sustainability of the unitised facility.

The agreement noted that the Unitised ALNG shall take no market price risk with the allocation of such a risk to be the subject of negotiation taking into consideration and reflecting the principles set forth in the HOA as between a PE, it’s upstream gas supplier(s)and LNG and NGC offtakers.

“It being recognised that nothing in the arrangement shall affect GORTT rights under production sharing contracts and or upstream licenses unless otherwise agreed by the GoRTT and the relevant upstream gas suppliers, nor does it affect any existing approvals under such production sharing contracts,” the agreement reads.

It also leaves the market open to the possibility of other parties supplying gas into Atlantic.

It said “the parties agree that the ongoing financial an operational viability of the unitised facility shall depend on the discovery and development of additional gas reserves and enhanced development and production from existing reserves as such and respect of the developments by third parties that PEs shall use commercially reasonable efforts to negotiate terms that facilitates access by third party gas suppliers in the unitised facility on reasonable terms.”

 

[The Exit of PRC investors in Train 1 is welcome, reducing the regional footprint of totalitarian tyranny. With citizens battered by loss of jobs, crime, murders reaching 600, floods, disease, crumbling infrastructure, shortages of water and food, state corruption flourishes. As in the Paria Pipeline accident, the underclass regime offers no salvation and the future is bleak. despite high energy prices . Corrupt culprits remain in control, funded by the European war windfall, jeopardising future progress as gas takes centre stage. Squandermania of public funds continues unabated from state coffers brimming with taxes.]

 

 

Point Lisas Steel plant to re-open ?

(November 9, 2022)

 six years after closure but is expected to hit the buffers for lack of gas.

An outrageous plan by new owners to re-open the Iron and Steel Plant at the Point Lisas Industrial Estate and seek Cabinet approval for T&TEC to negotiate a power purchase agreement with T&T Iron and Steel, confirms the abhorrent regime has not learned recent lessons about gas supply and is insanely repeating the mistakes of the past, with its eyes wide open.

Liquidator Christopher Kelshall approved transfer of the defunct plant to T&T Iron and Steel, the company signed a term sheet agreement with the National Gas Company Ltd for an initial nine million standard cubic feet of natural gas per day (mmscf/d) starting in 2023 and increasing to 55 mmscf/d when it is into full operations by 2025/2026, weeks before the ALNG restructuring agreement.

The plan is to start off with the Melt shop and produce billets and coils using scrap iron, both locally sourced and imported. The use of scrap iron could be a solution to the present standoff scrap iron, could be now used in the steel plant. Plans include refurbishment of the DR 3 plant in time for the 2024 when additional natural gas is expected to be made available to the steel plant.

In 2024 the plan is to make Direct Reduced Iron (DRI) and therefore phase out the use of scrap iron. DRI is a cleaner process and will producer a better grade of Steel and fetch better international prices .

Following the 2024 start up of the DRI 3 plant, the plan is to refurbish DR 2 plant for start up early 2026.

It is expected that the steel plant will have fewer employees than the Arcelor Mittal plant that employed on a daily basis up to 2,000 mainly contract employees. The proponents of T&T Iron and Steel expect to employ between 700 and 1,000 people. Initially it proposed to create 250 permanent jobs.

High quality jobs will lead to significantly more electricity being sold, with an estimated total power requirements of 240 mega watts a day or 17 per cent of what the entire country uses at present. This would help T&TEC’s finances, it will lead to more fees being paid to National Energy for port services and allow Plipdecco to collect significant rent.

The regime was condemned for the initial closure of the plant and the failure to protect workers. Built by the PNM government of Dr Eric Williams, Arcelor Mittal’s chairman Lakshmi Mittal in 1994 purchased the plant for US$70 million. In 2016 after failing to get natural gas and electricity rates at prices it sought, Mittal closed the plant and left with loss of 600 plus permanent workers,

With gas in demand for LNG, and local petrochemical plants deprived of supply, NGC stubbornly continues along the path to destruction, refusing to accept reality after 4 years of heavy losses and the death of an energy minister.)

 

 

 

Global Steel Sector Outlook Deteriorates on Lower Consumption

13 Dec, 2022 Fitch Ratings-London

The global steel sector will not fully recover in 2023 from the supply-demand shift in favour of end-markets caused by reduced consumption in 2H22, We expect materially lower earnings for steelmakers as the global economic slowdown has ended the period of exceptionally high prices supported by post-pandemic pent-up demand.

Steel markets will normalise in 2023 with volumes broadly similar to 2021 levels excluding PRC. We expect global steel consumption to shrink by 60 million-65 million tonnes in 2022, with capacity utilisation dropping from 80% to 77%.

China’s targeted reduction of steel production will account for 20 million-30 million tonnes of this, with the rest coming from demand destruction outside PRC.

Fitch expects incremental growth in steel consumption in 2023 in markets such as India, southeast Asia and the US, which will exceed the managed decline in PRC by 25 million-35 million tonnes.

Prospects for steel companies remain gloomy in Europe due to high and volatile energy costs, the looming recession, waning consumer confidence, and the greater need to re-design supply chains for the steel sector and possibly its end-markets.

However, in some markets, including North America, India, Turkey and Brazil, sentiment remains more positive than our mid-cycle assumptions, benefiting from protectionist trade measures, government support for infrastructure spending and cost advantages in some markets.

 

 

First bpTT compression platform operating offshore

Nov. 30, 2022

bp Trinidad and Tobago (bpTT) has produced first gas from the offshore Cassia C development.

LONDON — bp Trinidad and Tobago (bpTT) has produced first gas from the offshore Cassia C development.

This is the company’s 16th and largest offshore facility to date and its first compression platform, designed to produce the low-pressure gas resources from the Greater Cassia Area. It is connected to the Cassia hub, 35 miles from Trinidad’s southeast coast.

At peak, Cassia C should deliver 200 MMcf/d to 300 MMcf/d of gas.

TOFCO (Trinidad Offshore Fabricators) built the jacket and supporting frame while McDermott’s yard in Altamira, Mexico, constructed the topside structure.

11.30.2022

BP starts production from Cassia C facility

World Oil Staff November 29, (WO)

BP Trinidad and Tobago, a subsidiary of BP, reported that its Cassia C development has successfully delivered first gas.