Over the last week the rev­e­la­tion that the Board of Di­rec­tors of the Na­tion­al Gas Com­pa­ny (NGC) had sought and re­ceived, at least in prin­ci­ple, an in­dem­ni­ty (pro­tec­tion against loss or fi­nan­cial bur­den) from the Dr Kei­th Row­ley ad­min­is­tra­tion for hav­ing spent more than a quar­ter bil­lion dol­lars on what now ap­pears to be a failed at­tempt to res­cue At­lantic LNG Train 1 has caused great con­cern among many in the coun­try.

Much of the dis­qui­et stems from what ap­pears to be gov­ern­ment mak­ing the rare move to in­dem­ni­fy di­rec­tors of a state-owned en­ter­prise even be­fore an in­vest­ment is made and the stench that these di­rec­tors were at least try­ing to pro­tect them­selves should the mon­ey be lost.

The fun­da­men­tal ques­tion at play here is: if the di­rec­tors be­lieved that the in­vest­ment in Train 1 was a good one why would they want to in­dem­ni­fy them­selves?

The on­ly log­ic is that they un­der­stood the ex­tent of the risk, or were co­erced by the Gov­ern­ment to make the deal and want­ed to en­sure they did not end up like the late Mal­colm Jones, hav­ing to spend mil­lions of their own mon­ey to de­fend them­selves against the might of the State should there be a change in gov­ern­ment.

That the Row­ley ad­min­is­tra­tion would agree to such an in­dem­ni­ty re­quest is it­self ques­tion­able and rais­es the is­sue of its com­mit­ment to the high­est lev­el of cor­po­rate gov­er­nance and, whether in grant­i­ng this get-out-of-jail free card, it is in fact send­ing a mes­sage that spend­ing and los­ing over $250 mil­lion of the ul­ti­mate share­hold­ers of the NGC--the peo­ple of T&T--mon­ey is not an is­sue.

We have seen the pub­lic re­la­tions of­fen­sive of the Gov­ern­ment.

We have seen the at­tempt to blame the multi­na­tion­als for our mis­steps. Yes it’s the colo­nial mas­ters’ fault.

The 1970 black pow­er move­ment and the im­por­tant is­sues it dealt with and our march for in­de­pen­dence must not be seen as a crutch to avoid tak­ing re­spon­si­bil­i­ty for what we are do­ing to­day.

These are the facts and no amount of ob­fus­ca­tion by the gov­ern­ment and its sup­port­ers will change them.

On De­cem­ber 3, 2020, bpTT wrote to the Na­tion­al Gas Com­pa­ny and said it would not be able to pro­vide its dai­ly con­tract­ed quan­ti­ties (DCQ) for 2021. BpTT al­so in­formed the NGC that it may want to take this lack of gas in­to ac­count in de­cid­ing if to in­vest in the Train 1 res­cue Pack­age.

An­oth­er fact is that on May 10, 2019 the Busi­ness Guardian re­port­ed that bpTT’s in­fill drilling pro­gramme had failed and it would lead to a sig­nif­i­cant re­duc­tion in the com­pa­ny’s nat­ur­al gas pro­duc­tion.

In his mid-year bud­get re­view, days af­ter the bpTT an­nounce­ment of the bad re­sults from its in­fill drilling pro­gramme the Min­is­ter of Fi­nance Colm Im­bert told the Par­lia­ment that it was on­ly one well that failed and that there was no cause for con­cern.

This has been part of the nor­mal strat­e­gy of the Row­ley ad­min­is­tra­tion to pre­tend to the coun­try that every­thing is fine and it’s the me­dia and oth­ers who are try­ing to em­bar­rass the coun­try or the ad­min­is­tra­tion and it should be trust­ed be­cause it has the in­for­ma­tion and the min­is­ters and some of their sup­port­ers alone went to school and know every­thing.

On De­cem­ber 3, the late En­er­gy Min­is­ter Franklin Khan told the Par­lia­ment that Train 1 will not be shut­ting down as was re­port­ed in the Busi­ness Guardian days be­fore and that sen­si­tive ne­go­ti­a­tions were hap­pen­ing.

Khan not­ed: “On­ly last night (De­cem­ber 3) the share­hold­ers of At­lantic Train 1, ap­proved the turn­around (TA)”.

Ac­cord­ing to Khan, the turn­around would take place in Jan­u­ary and would keep it in an “op­er­a­tions ready mode” for all of 2021 in­to 2022.

When asked if the share­hold­ers had agreed to sup­ply gas to Train 1, Khan said: “The is­sue of the op­er­abil­i­ty of the plant will de­pend on the TA.”

On the gas sup­ply side, Khan not­ed ne­go­ti­a­tions are still un­der­way to source a con­tin­ued sup­ply be­cause the train was nor­mal­ly sup­plied 100 per cent by bpTT.

The For­mer En­er­gy Min­is­ter said: “BP is say­ing that they have a short­age and they can­not sup­ply, but BP is not the on­ly sup­pli­er of gas in Trinidad so we are in some sen­si­tive ne­go­ti­a­tions, let me make that point, with up­stream­ers to sup­ply gas to Train 1.”

Yes it is al­ways about sen­si­tive ne­go­ti­a­tions.

Fact again, the NGC which owns 10 per cent of Train 1 and has lit­tle of its own gas de­cid­ed to pay the US$24.7 mil­lion or $168 mil­lion to do the turn­around that Khan spoke about on De­cem­ber 3, 2020.

By let­ter dat­ed Feb­ru­ary 8, 2021, the Board of Di­rec­tors sent an in­dem­ni­ty for ap­proval of the Min­is­ter of Fi­nance.

The in­dem­ni­ty seeks to ab­solve the Board from any re­spon­si­bil­i­ty should the NGC lose the $168 mil­lion it in­vest­ed, know­ing from the start that bpTT which sup­plied all the gas in Train 1 did not have the hy­dro­car­bons nor did the NGC.

On Feb­ru­ary 25, the board again wrote the Min­is­ter of Fi­nance ask­ing to ap­prove it spend­ing an­oth­er US $40 mil­lion or $272 mil­lion be­hind the At­lantic LNG res­cue deal.

The board want­ed fur­ther pro­tec­tion from the Gov­ern­ment for its de­ci­sion to spend what would now to­tal $440 mil­lion with not a cu­bic foot of LNG pro­duced from the plant since De­cem­ber 2020 and no gas in sight. The ad­di­tion­al $272 mil­lion was to pay main­te­nance fees for the plant.

An­oth­er fact is the NGC breached its own agree­ment with At­lantic LNG to pay for the main­te­nance of the plant and it ap­pears that by June the board fi­nal­ly re­alised it could no longer throw good mon­ey be­hind bad and stopped pay­ing for the main­te­nance of Train 1.

By let­ter dat­ed Au­gust 3, At­lantic LNG’s Chief Ex­ec­u­tive Of­fi­cer Ronald Adams wrote to the NGC Pres­i­dent Mark Lo­quan and in­formed him due to the non-re­ceipt of pay­ments for June and Ju­ly the deal to keep At­lantic ready for op­er­a­tions had been ter­mi­nat­ed.

Gre­go­ry McGuire, a well re­spect­ed en­er­gy con­sul­tant, for­mer NGC em­ploy­ee and con­sul­tant for the NGC and head of our Trans­paren­cy Ini­tia­tive, the EITI wrote a piece in de­fence of the NGC.

His ar­gu­ments were es­sen­tial­ly that the NGC and gov­ern­ment’s in­ter­est are not nec­es­sar­i­ly aligned with the multi­na­tion­als. We could ac­cept that.

McGuire al­so ar­gued that bpTT and Shell make supra­nor­mal prof­its from Trains 2/3 and ques­tioned why they have gas for those trains and not Train 1. Well Gre­go­ry it’s called hav­ing con­tracts.

The con­tract for Train 1 has ex­pired. If your sup­ply is lim­it­ed it makes sense to sup­ply where you have con­tracts and avoid le­gal ram­i­fi­ca­tions rather than sup­ply to where there is no con­tract as a favour to some­one.

He made the point that de­mand dri­ves ex­plo­ration.

True, but Gre­go­ry, do you know we have been in a nat­ur­al gas deficit po­si­tion for a decade and there­fore there is in­cen­tive to find more gas?

Why do you think Touch­stone has been so ex­cit­ed about its dis­cov­ery?

The en­er­gy con­sul­tant makes the point that the NGC owns sig­nif­i­cant up­stream as­sets.

It is true that the NGC’s up­stream as­sets have in­creased but it is al­so fact that the NGC does not have the 250 mil­lion stan­dard cu­bic feet of nat­ur­al gas per day (mm­scf/d) that is a min­i­mum re­quire­ment to run Train 1 at 50 per cent ca­pac­i­ty.

One more cor­rec­tion, Gre­go­ry, due to de­bot­tle­neck­ing, Train 1 re­quires 500 mm­scf/d not 400 mm­scf/d as you sug­gest­ed in your ex­plain­er which the gov­ern­ment and its sup­port­ers have used as the gold stan­dard of in­tel­lec­tu­al prowess and un­der­stand­ing of the en­er­gy sec­tor.

The whole sit­u­a­tion reeks and the coun­try knows it. No doubt the gov­ern­ment hopes it will blow over.

It is a good bet they are like­ly to win. The ques­tion is: who is the re­al los­er in all of this?