The emergence of shale gas on the world energy market will not be the death of local-based liquefied natural gas (LNG) company Atlantic, says chief executive officer Nigel Darlow. “Some commentators have said that the development of shale gas is detrimental to LNG and to Atlantic. That is not true. Yes, the United States used to be an important market to T&T’s LNG, but over the last few years, Atlantic’s LNG has been increasingly diverted away from the US to higher-priced markets. The fact is, less than one in five Atlantic cargoes went to the US last year and we expect this reduction in US-based cargoes to continue,” he said. Darlow added: “Of those cargoes that did go to the US, all went into the northeast market (Boston), which trades at a significant premium to Henry Hub. In 2011, no Atlantic cargoes were sold at Henry Hub prices. Atlantic’s cargoes have been successfully diverted to more lucrative markets where LNG commands a premium price.”
Darlow was speaking at the April 14 Atlantic CEO’s Sustainability Awards held at the Hilton Trinidad and Conference Centre, located on Lady Young Road, St Ann’s. He said higher LNG prices meant good news for all stakeholders in Atlantic, including the Government and the people of T&T. Nuclear energy aborted. Confirmation that such countries as Germany, Switzerland and Italy were abandoning ambitions to make nuclear energy an appropriate alternative to meet their growing energy needs—following March 2011 the Fukushima Daiichi nuclear disaster in Japan—have convinced Darlow that those governments will seek out a company like Atlantic to fill their needs. Atlantic will be ready, Darlow said. He said: “Our industry continues to evolve. Data from the 2010 Statistical Review of World Energy indicates that worldwide, gas consumption grew by 7.4 per cent and natural gas trade by ten per cent. This is the strongest increase since 1984. “Trade in LNG accounted for 30 per cent of global natural gas, a figure that is projected to rise as a result of increasing demand. All this comes during a supposed global downturn.
“Not so for the LNG business, which grows from strength to strength. Global LNG prices remain very strong, especially in Asia, Europe and South America. The one exception, of course, is the US, where Henry Hub prices have fallen to dramatically low levels in large part due to the revolution in shale gas. LNG imports into the US have decreased considerably and analysts expect that in the near future, the US will become a natural gas exporter.” Considering that gas supply was of critical importance to the continued success of Atlantic globally, Darlow said it was natural that news about recent gas supply shortages in T&T was cause for concern. He said there had been prolonged discussion about how this shortage has impacted operations on the Point Lisas industrial estate. Atlantic’s operations were also negatively affected.
State investment crucial
“Given the high contribution Atlantic revenues make to the national gross domestic product (GDP), this has had a negative impact on the revenue to the Government and the people of T&T. Securing reliable, long-term gas supply is critical,” said Darlow. “The Government must ensure an environment which encourages continued investment in the exploration and production sector and that T&T remains an internationally attractive and competitive place for upstream investment. “This Government has shown a willingness to create such an environment and has successfully announced a number of recent production sharing contract awards and will shortly be launching the much-anticipated deepwater licensing round.” He went on to express optimism that new exploration efforts in T&T waters would yield significant further oil and gas discoveries and help underpin T&T’s energy industry for future generations.