Gov­ern­ment plans to re­view all mar­ket­ing agree­ments re­lat­ed to liqui­fied nat­ur­al gas (LNG) and new ne­go­ti­at­ed agree­ments will be struc­tured to en­sure com­mer­cial arrange­ments are eq­ui­table.

That's the word from En­er­gy Min­is­ter Nicole Olivierre, who said she was con­cerned that cur­rent con­trac­tu­al arrange­ments were not work­ing in the best in­ter­est of the coun­try.

In her con­tri­bu­tion to the T&T En­er­gy Con­fer­ence, which end­ed yes­ter­day at the Hy­att Re­gency in Port-of-Spain, the min­is­ter said LNG ac­count­ed for 55 per cent of the coun­try's nat­ur­al gas util­i­sa­tion, so the state of that in­dus­try was of crit­i­cal im­por­tance.

"With many of our com­mer­cial pric­ing arrange­ments tied to a US des­ti­na­tion, this coun­try is re­al­is­ing net­backs well be­low the mar­ket price ap­plic­a­ble to the true des­ti­na­tion of our car­goes. The on­ly con­clu­sion that can be drawn is that the con­trac­tu­al arrange­ments of LNG are not now work­ing in the best in­ter­est of Trinidad and To­ba­go," she said.

Olivierre won­dered about the pre­vi­ous arrange­ment where the up­side was to be shared 50/50 be­tween the LNG part­ners and Gov­ern­ment.

"Is it that the LNG part­ners are now di­vert­ing car­goes to the South Amer­i­can mar­ket in a trans­fer pric­ing arrange­ment to avoid shar­ing the up­side?" she asked.

The min­is­ter said the 2018 ex­pi­ra­tion of Train 1 LNG con­tracts is an op­por­tu­ni­ty "to be­gin to re­cal­i­brate the do­mes­tic LNG in­dus­try" in­to one that brings greater ben­e­fits to T&T.

"The state al­so has the op­tion of en­ter­ing in­to its own mar­ket­ing arrange­ments for the min­is­ter's share of gas un­der the ex­ist­ing pro­duc­tion shar­ing con­tracts. This is an op­tion that the Min­istry of En­er­gy and En­er­gy In­dus­tries in­tends to vig­or­ous­ly pur­sued along with the NGC."

Olivierre said the nat­ur­al gas mar­ket, like crude oil, was fac­ing many chal­lenges and there had been a pro­nounced down­ward re­vi­sion of fu­ture nat­ur­al gas price ex­pec­ta­tions.

"All avail­able ev­i­dence sug­gest that the cur­rent over­sup­ply of gas is more than just a tem­po­rary phe­nom­e­non," she said.

Not­ing that the Unit­ed States was re­sum­ing ex­por­ta­tion of nat­ur­al gas, the min­is­ter said while mar­kets in Eu­rope and Asia were cur­rent­ly be­ing tar­get­ed, she was not dis­count­ing the pos­si­bil­i­ty of mar­kets in the At­lantic basin even­tu­al­ly be­ing pur­sued.

"We there­fore must re­cal­i­brate our LNG busi­ness mod­el in T&T with em­pha­sis on re­duc­ing costs, in­creas­ing pro­duc­tiv­i­ty and op­ti­mis­ing rev­enue to the coun­try. This will re­quire the ac­com­mo­da­tion and co-op­er­a­tion of all the stake­hold­ers in the lo­cal LNG val­ue chain," she said.