PORT OF SPAIN, Nov. 10 -- Trinidad and Tobago will decide by yearend if it will approve the debottlenecking of Atlantic LNG’s four trains and the export of an additional 300 MMcfd of natural gas.
The Caribbean twin-island nation’s Energy Minister Carolyn Seepersad-Bachan said the government is studying whether at this stage the country has the gas to commit to LNG.
“Our concern is that these contracts are long term and while it is true that we have an oversupply situation at the moment, we are talking about 20-year contracts. We have to study whether we will be able to support further expansion,” Seepersad-Bachan said.
ALNG partners have been pushing for the increase throughput in the plant saying it will take 18 months to complete the debottlenecking at a cost of $550 million.
BP Trinidad & Tobago’s outgoing Chairman and Chief Executive Officer Robert Riley said the LNG partners think this could be beneficial to all the parties.
“We saw that as giving the government a relatively quick boost in income stream,” Riley told OGJ. “We saw it as giving it a relatively quick boost in economic activity because things have to go on at Point Fortin and we saw it as being reasonably neutral as to gas supply over the long term,” he said.
“We saw it as dealing with a problem which is that the industry has invested in gas production which it cannot deliver starting in 2011 so we saw it as win-win for the state and us,” Riley added.
He said he felt that debottlenecking was a better option than the construction of a new train. “We think that if you are going to expand LNG in any way the first step must be to maximize the throughput of the existing plant. We believe that is the most efficient use of capital,” he said.
Riley said LNG still remained the most attractive option for the upstream producers to sell their natural gas since they earn twice from LNG what they get from the domestic market.
Riley said while the new government has been clear with the upstream producers that they want them to explore their present acreage and go into the deep water it has not been as clear on the market side of the business. He added that the signs appear to show some trepidation on the part of the new administration.
“Some of the early statements would suggest that there is some skepticism about debottlenecking,” he said. “We still believe that the shortest route to solving the acute oversupply problem we have near term is to put more gas through [ALNG]. Certainly revenue yield from LNG even at these prices is still as good as or better than the domestic industry for the government,” Riley said.
“But the dilemma for the government long term is what if we get out there then having de bottlenecked and we aren’t finding sources of gas sufficiently quickly to cater for that expansion and also to deal with some the domestic opportunities that they want to bring,” he noted.
ALNG partners continue push for increased throughput