Page 5 - LatAmOil Week 29 2021

LatAmOil COMMENTARY LatAmOil

It was taken off line earlier this year for a turn- deal with BP and Shell. “The government and
around maintenance programme, and press [NGC] have ensured that Atlantic [LNG] is pre-
agencies in Trinidad and Tobago have reported served in the best position to allow all options
that the shutdown may become permanent, with respect to its future to be available whilst
owing to questions about feedstock supplies and these discussions are ongoing,” it said.
a proposal for reorganisation of the shareholder
roster. BP and Shell respond
The questions about feedstock stem partly Meanwhile, BP has also downplayed reports of
from the fact that BP has been supplying more disagreement between shareholders in Train 1.
than 70% of all the gas processed at Atlantic As one of the company’s local subsidiaries
LNG, even though it has a smaller stake in each remarked to the Trinidad Express newspaper,
production train than Shell does. They are also “Contrary to what has been reported by one
related to BP’s announcement in 2019 that it media organisation, there is no ‘ongoing fight’
could not maintain gas supplies to the lique- between BP and the majority shareholder in
faction plant at the level of 500 mmcf per day Atlantic LNG. Instead, it declared that it had
because its infill drilling project was delivering been “working closely” with Shell and NGC, as BP has been
disappointing results – and the subsequent well as the government of Trinidad and Tobago,
decline in the plant’s output. to explore the shareholder restructuring plan. supplying more
BP and Shell are also at odds over the latter’s This plan “offers an opportunity to improve
call for reorganising Atlantic LNG’s ownership operating efficiency and commercial align- than 70% of
structure. Briefly speaking, the Anglo-Dutch ment,” BP added. It went on to say that its own
major is looking to consolidate equity stakes so wish was “to arrive at an outcome that improves all the gas
that each investor ends up with an interest in the value to the country while ensuring we have a processed at
whole plant, rather than multiple stakes of dif- competitive energy sector that can continue to
ferent size in each production train. attract the investments required to keep the pro- Atlantic LNG
duction profile needed to satisfy downstream
NGC’s dissatisfaction and LNG demand.”
The disagreements between BP and Shell appear Shell has made similar comments. In
to be a source of irritation for NGC. response to questions from Trinidad & Tobago
According to local media sources, the latter Guardian, it touted the ownership reorganisa-
company has been complaining that neither of tion plan, saying that this change would facilitate
the two majors are working actively enough to longer-term investments in the region. “Shell –
ensure deliveries of feedstock to Atlantic LNG’s together with Atlantic, its fellow shareholders
Train 1 so that it could remain in operation. It and the government of Trinidad and Tobago –
has also bristled at the prospect of seeing Train 1 have been working co-operatively on the com-
shut down permanently after spending $250mn mercial restructuring of Atlantic [LNG] with a
or more on the turnaround programme, some view to ensuring the sustainability of the entity
observers claim. as a world-class LNG facility,” it said in an email
NGC is also said to have criticised BP and message.
Shell for not matching its efforts to find new Under these circumstances, Shell’s
sources of gas for Train 1. The state-run firm announcement of the launch of production
has talked about sourcing gas from smaller operations at Block 5C is not likely to change
upstream operators such as Touchstone Explo- anything. It does raise the possibility that some
ration, which recently reported a discovery at of the gas flows from this new field might be
the Ortoire field. used to bolster throughput levels, but it does not
Publicly, NGC has been less critical. In a address the other issues at stake.
statement issued on July 17, it acknowledged As such, LatAmOil does not expect the
that shareholders in Train 1 were involved in shareholders in Train 1 to strike any new agree-
sensitive talks about the fate of the facility and ments or make much progress toward resolution
indicated that it was still hopeful of striking a of their disputes before the end of this year. ™

(Photo: Atlantic LNG)

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