En­er­gy gi­ant BP yes­ter­day said that the "im­pli­ca­tions of im­pro­pri­ety in BP LNG sales re­port­ed in re­cent me­dia ar­ti­cles are in­cor­rect." The com­pa­ny was re­spond­ing to last week's state­ment by En­er­gy Min­is­ter Kevin Ram­nar­ine that T&T lost an es­ti­mat­ed US$120 mil­lion ($771 mil­lion) be­tween 2009 and 2012 be­cause state-owned Na­tion­al Gas Com­pa­ny's (NGC) eq­ui­ty gas from Train IV was mar­ket­ed by BP in that pe­ri­od.

NGC has an 11.11 per cent stake in Train IV, which en­ti­tles the com­pa­ny to that per­cent­age of the pro­duc­tion of the liq­ue­fac­tion plant-11.11 per cent of Train IV's rat­ed ca­pac­i­ty of 5.2 mil­lion met­ric tonnes per an­num (mmp­ta) or 577,720 met­ric tonnes per an­num.

Speak­ing in the Sen­ate last week, Ram­nar­ine said that NGC end­ed the com­mer­cial re­la­tion­ship with the BP mar­ket­ing sub­sidiary that sold the state com­pa­ny's nat­ur­al gas ear­li­er this year. The first car­go sold in­de­pen­dent­ly by NGC in Au­gust by an in­ter­na­tion­al bid­ding process re­sult­ed in the com­pa­ny get­ting a price of US$9.25 per MMB­tu (mil­lion British ther­mal unit) for 118,000 cu­bic me­tres of LNG.

He said a cal­cu­la­tion of what would have been earned had this car­go been mar­ket­ed un­der the pre­vi­ous arrange­ment, shows that "we would have got­ten a price of around US$1.60 per MMB­tu. That is US$4.3 mil­lion. There­fore, by mak­ing this very bold and strate­gic move, the NGC was able to gain over US $20 mil­lion in in­cre­men­tal rev­enue on one car­go."

In a di­rect re­sponse to the state­ment by the Min­is­ter of En­er­gy, which was re­port­ed ex­clu­sive­ly by the Guardian on Mon­day, said that con­trac­tu­al oblig­a­tions lim­it how much in­for­ma­tion BP can dis­close on its LNG con­tracts, "how­ev­er what we can say is that the im­pli­ca­tions of im­pro­pri­ety in BP LNG sales re­port­ed in re­cent me­dia ar­ti­cles are in­cor­rect."

The en­er­gy gi­ant said that it the lead up to the fi­nal in­vest­ment de­ci­sion and even­tu­al con­struc­tion of At­lantic LNG Train 4 (AL­NG T4), the joint ven­ture part­ners, which in­clud­ed BP and the Gov­ern­ment of the Re­pub­lic of Trinidad and To­ba­go, mu­tu­al­ly agreed the arrange­ments need­ed to en­able the de­vel­op­ment of the project, in­clud­ing a gas sup­ply and LNG mar­ket­ing arrange­ments to al­low NGC's par­tic­i­pa­tion in the LNG val­ue chain.

This led to the suc­cess­ful start up of AL­NG Train IV in De­cem­ber 2005. "BP's in­tent in 2005 when we en­tered in­to a mar­ket­ing arrange­ment with the Na­tion­al Gas Com­pa­ny (NGC) was al­ways to en­sure that the LNG car­goes got a fair mar­ket price based on the pre­vail­ing mar­ket con­di­tions as well as to en­sure that we sup­port­ed the NGC in build­ing its own LNG trad­ing ca­pa­bil­i­ties to be able to take over the mar­ket­ing of their car­goes at some point in the fu­ture," the en­er­gy com­pa­ny said.

But it added that mar­ket con­di­tions have since changed con­sid­er­ably and BP is un­der­stand­ing of the gov­ern­ment's de­sire to mar­ket its car­goes in the spot mar­ket which is cur­rent­ly at­tract­ing high­er prices. BP stat­ed that it does not agree with Ram­nar­ine's state­ment that US$120 mil­lion would have ac­crued to NGC had the com­mer­cial arrange­ments be­tween BP and NGC not been in place.

"We would like to point out that this fig­ure is open to a lot of sub­jec­tiv­i­ty in the un­der­pin­ning as­sump­tions which we do not share. Fur­ther, we do not wish to de­bate the mer­its of spot ver­sus term con­tract arrange­ments as his­to­ry tends to prove most price pre­dic­tions wrong."