BPTT is denying that there is any link between the sale of its interest in Atlas Methanol Company and the its inability to supply the plant with all its required gas, as it has done since Atlas startup in 2004.
The plant uses 165 million standard cubic feet of natural gas per day (mmscf/d) and even during the natural gas curtailment all Atlas requirements were met. At the time bpTT was a shareholder and provided all the gas the Atlas plant needed.
However effective January 1, 2021, bpTT is no longer a shareholder in Atlas and as of January 1, 2021 bpTT has indicated that it only has gas to meet 80 per cent of the plant’s demand.
“This time the NGC cannot be faulted for what is happening. The fact is from the start of this arrangement, more than 15 years ago, Atlas would indicate to the NGC on a monthly basis how much gas it required and that information is then passed onto bpTT which would allocate the tranche of gas specifically for Atlas,” an NGC source told the Business Guardian.
However to the NGC’s surprise, when Atlas indicated that it was going to need 165 mmscf/d for January and the figure passed onto bpTT, the NGC was informed that bpTT will only be able to supply 132 mmscf/d.
The Business Guardian asked bpTT the following questions:
• Can bpTT say if it has indicated to the NGC that it cannot for the month of January meet the natural gas requirements of the Atlas Methanol plant?
• Is this the first time this has been the case since the plant was constructed ?
• Why the inability to meet the gas requirement?
• Does it have to do with bpTT no longer being a shareholder?
In an immediate response the company denied any suggestion that it does not have the gas to meet Atlas demands because it sold its interest in the methanol plant.
“BPTT is committed to complying with the terms of its gas supply contracts and strongly denies your suggestion that any changes to Atlas Methanol’s gas supply are related to its divestment of its shareholding in Atlas Methanol” the company said.
“Due to confidentiality provisions in the gas supply contract with NGC in service of Atlas Methanol we are precluded from providing information relating to this contract.”
On June 29 last year, BP, the parent company of bpTT, announced that it had agreed to sell its global petrochemicals business to INEOS for a total consideration of $5 billion, subject to customary adjustments.
It said the agreed sale was the next strategic step in reinventing BP, that it will further strengthen BP’s balance sheet and delivers its target for agreed divestment a year earlier than originally scheduled.
Under the terms of the agreement, INEOS agreed to pay BP a deposit of $400 million and a further $3.6 billion on completion. An additional $1 billion was deferred and is to be paid in three separate instalments of $100 million in March, April and May 2021 with the remaining $700 million payable by the end of June 2021.
BP’s petrochemicals business was focused on two main areas —aromatics and acetyls—with interests in 14 manufacturing plants in Asia, Europe and the US and in 2019 produced 9.7 million tonnes of petrochemicals.
Part of the sale was the company’s almost 40 per cent interest in Atlas Methanol.
INEOS is a leading global chemicals company with a network spanning over 180 sites in 26 countries, employing 22,000 staff worldwide. Over the past two decades, INEOS has acquired a number of businesses from BP, most notably the 2005 $9 billion purchase of Innovene, the BP subsidiary that comprised the majority of BP’s then chemicals assets and two refineries.
Last month bpTT added that its production in 2020 and 2021 has been impacted by the disappointing results from its infill drilling programmes at the beginning of 2019.
“Following the results of the infill drilling programme in 2019, we sought to mitigate production declines by increasing our focus on well work and system optimisation to maximise production from our existing fields. These measures had the desired effect in 2019 and 2020 of slowing the rate of natural field declines.”
The company said it will continue to focus on well work and system optimisation into 2021 however its outlook for next year has been impacted negatively by COVID-19.
“The virus has impacted the schedule for the Cassia Compression project, the start-up of which has been delayed from 2021 into 2022. The combined effect of natural field declines and the delay in the Cassia compression project means that our production outlook for 2021 will be lower than 2020. We do anticipate that in 2022 production volumes will improve with the start-up of the Cassia Compression and Matapal projects,” it added.
The Atlas methanol plant is one of the largest in the world and the second largest in the country. It produces 5,000 tonne/day or 1.7m tonne/year.
It started construction in 2001 and was completed in 2004 at a cost of the $400m .
Only last week the majority shareholder in Atlas Methanol, Methanex Corporation announced it will focus on running only Atlas in T&T because it was not confident of reaching an agreement with the NGC for gas for its Titan methanol plant.
Late last year Methanex spent hundreds of millions of TT dollars to do turnaround on the Atlas Methanol Plant.