Energy chamber, McGuire: Cautiously optimistic with LNG restructuring

The content originally appeared on: Trinidad and Tobago Newsday

Atlantic LNG, Point Fortin. FILE PHOTO/ JEFF K MAYERS –

THE signing of the Atlantic LNG restructuring deal in London earlier this week, is being viewed by the Energy Chamber as a major development for TT’s gas sector and overall economy.

While welcoming the news of the agreement, the chamber is expressing cautious optimism as full details are yet to be specified.

Earlier this week, Prime Minister Dr Keith Rowley, who is in London along with Energy Minister Stuart Young, signed a Unitised Commercial Structure for Atlantic LNG between the National Gas Company (NGC), bpTT and Shell.

Rowley said the intensive work conducted over a five-year period will see increased shareholding in future trains. He said NGC’s ability to obtain a greater revenue share, derived from the sale of LNG on the global market for TT, would provide long-term sustainability of the local gas sector and a higher level of certainty, which is crucial for future investment.

The chamber in a release complemented the negotiating teams for completing this complex process and for delivering the new commercial and legal structure for Atlantic.

“This is a major development for the TT gas sector and therefore the overall economy of the country,” it said.

It added the restructuring of Atlantic will create greater certainty for the facility’s shareholders and allow investment into the plant, including investments to reduce the carbon footprint of LNG produced through Atlantic.

“While the specific details of the new commercial and legal structure are not yet known, we are cautiously optimistic that the new structure will positively influence much-needed future investment into upstream gas production. Increased investment into upstream production will provide additional work for the service companies and contractors, increased security of supply to the downstream plants and increased government revenue.”

Energy analyst Gregory McGuire agreed that restructuring gives more equity to NGC and TT.

“In theory, it means a larger share of profits will come to TT. Further, TT now has a firm seat at the table to be a party to discussions about the operations of the business.

“In practice, these additional benefits will only be maximised if and when there is a secure and reliable supply of gas to run the trains. When capacity is underutilised, returns will be suppressed.”