Prime Minister Dr Keith Rowley says despite the lack of a gas to supply Atlantic LNG’s Train 1 project, it is not yet dead and the Government is still holding out hope that it will be reanimated. However, a final decision on its future will come by the end of March next year.
Rowley made the comment as he updated the country on what transpired during his attendance at the recent United Nations Climate Change Conference (COP26) in Glasgow, Scotland and energy meetings with Shell and BP in the UK.
Addressing Train 1 specifically during a media conference at the Piarco International Airport on his return from the UK on Saturday night, Rowley said the restructuring of the arrangement was one of the key topics discussed with the energy companies.
“It is not for the Government to just walk out of a situation on Train 1. Train 1 is integrally connected to Trains 2, 3 and 4 and it’s not that we own the business, we are only a ten per cent owner but as a country, we have a much larger interest than ten per cent so we would be the last person to walk away from the table on Train 1 but in the discussions that we have been having, we as a Government would have done and we continue to give hope for the breathing of life into Train 1 until the doctor says it’s dead,” Rowley said.
“I think the doctor is putting on his coat right now and we had the kind of discussions where, with BP and Shell, particularly with BP, the largest gas producer, where, … initially we relied, Government relied, when we extended the life of Train 1 for five years and BP was engaged in an infield drilling programme, we anticipated a positive outturn. As fate would have it, BP drilled a number of dry holes and had to, in the end, confirm that we don’t have the gas for Train 1.”
The Prime Minister said as a 10 per cent shareholder in the Train 1 project, T&T had to spend some money to keep its options open but now the discussion was more about how to salvage the projects going forward.
“We spent, I think it is about 33 million US dollars to keep the Train 1 option open, not only for negotiation purposes but also for the possibility that if gas was available that we would continue. I think we can now conclude that the gas is not there because BP has not been successful,” the PM said.
“What we discussed is what BP is going to do going forward in terms of investing and again keep continuing to try to find more gas in the Columbus Basin and elsewhere. ... so that being so, the shareholders of Train 1 now have and we have agreed that by the end of the first quarter of 2022, we will take a definitive decision on how we together do what has to be done about Train 1 and attempt to conclude the restructuring of Trains 2, 3 and 4 where all the shareholders will have their interest well served in a restructured arrangement of the 2, 3 and 4 trains. So that is well underway and that was part of our discussions.”
Just last month, Guardian Media reported exclusively that after spending hundreds of millions of dollars on an attempt to save Atlantic LNG Train 1, the state-owned National Gas Company (NGC) had unilaterally walked away from its agreement to fund the maintenance of Atlantic LNG, in the process creating a crisis for the rest of the shareholders.
According to the Guardian Media reports, by December 3, 2020, bpTT had written to the NGC advising the state-owned company that it (bpTT) would not be delivering its full daily contracted quantities (DCQ) for the contract year 2021. bpTT further advised NGC that it (NGC) should take this into consideration before making any decision to invest in Train 1.
Guardian Media had access to a plethora of documents and based on multiple sourcing, confirmed that NGC—led by its president Mark Loquan—was convinced that it could procure the required gas for Train 1 and advised the board and the Government to pursue the unilateral funding of the Train 1 Turnaround (upgrade) and to fund the maintenance of the Train 1 operations
Train 1 first came into operations in Point Fortin back in March 1999 and produced LNG for the first time a month later, paving the way for the lucrative LNG industry in the energy sector. Since then, Atlantic has built three more LNG plants, called in the sector “trains,” along the South Western Peninsula.
However, over the past three years, the continued operation of Train 1, as well as the preservation of jobs attached to it, have come into focus.
In November 2018, Government had announced plans to extend Train 1 for five more years beyond its 20-year life, which would have come to an end in April 2019.
Concern over the future operations of Train 1 intensified 2019, when bpTT could not assure a continued gas supply to the train. However, amid concerns raised then, Finance Minister Colm Imbert assured that operations would continue.
In December 2020, late Minister of Energy Franklin Khan also gave assurances that Train 1 would not be mothballed at the start of this year.
In his contribution before the Parliament at that time, Khan said, “Train 1 will continue to operate in 2021 and will be part of wider negotiations, which have been taking place among the Atlantic LNG shareholders to form one unitised facility encompassing all four trains.”
Khan said then that NGC would facilitate a turnaround of Atlantic Train 1 and would keep it in “operations ready mode” for all of 2021 into 2022.