Restructuring close for Trinidad LNG producer

Trinidad and Tobago and majors Shell and BP are close to concluding the restructuring of the Atlantic consortium's LNG facility to increase the government's share, prime minister Keith Rowley said.

"It is expected that when the terms are finally agreed, Trinidad and Tobago will derive significant benefits in shareholding and pricing," Rowley said after recent meetings in Europe with principals of Shell and BP.

Neither the government nor the companies have indicated a target date for concluding the restructuring talks that started in 2018 and which Rowley's office said "are expected to be finalized soon."

Shell holds an average 53pc interest in the four-train 14.8mn t/yr liquefaction facility located at Point Fortin in southwest Trinidad. BP holds an average 39.2pc stake.

Trinidad's state-owned gas company NGC has a 10pc interest in Train 1 and 11.11pc in Train 4. China's sovereign wealth fund CIC unit Summer Soca owns 10pc of Train 1.

The disparate ownership structure of each of Atlantic's trains has complicated feedstock allocation since domestic natural gas production started falling just over a decade ago.

"The negotiations on the restructuring of Atlantic are ongoing, and we will continue to work with the government and Atlantic shareholders to ensure that both the shareholders and Trinidad and Tobago will derive significant benefit from the new commercial structure and enable future upstream developments," Shell told Argus this week.

BP "cannot offer anything further on the Atlantic talks at this time," the company told Argus, referring to a January 2022 statement that shareholders and the government had reached an initial agreement for restructuring the facility.

Trinidad's gas flow had been recovering since November 2017 following a long slide from a peak of 4.3 Bcf/d in 2010 that suppressed output of LNG, petrochemicals and fertilizers.

The expansion slowed in early 2020 when the Covid-19 pandemic prompted restrictions.

LNG output of 15.29mn m³ in 2021 was 36pc down from 2020, reflecting a 15pc fall in gas production.

The restructuring talks will "clarify" the future of Atlantic's oldest liquefaction unit — Train 1 — that has 25pc of the consortium's capacity and which was mothballed in January 2021 because of a shortage of feedstock, the energy ministry told Argus today.

"We are not in a position to comment on Train 1 as our focus is on the restructuring exercise at the moment," Shell said.

By Canute James