On Thursday February 24, 203 days ago, the Business Guardian (BG) carried a headline ‘Secret deal: Govt agrees Atlantic LNG Train 1 is dead’. It was the lead story that spoke of the end of T&T’s first LNG train, and it having to be mothballed.
The following is part of that article:
The Keith Rowley administration has quietly walked away from any hope of salvaging Atlantic LNG Train 1 and has instead signed an agreement with Royal Dutch Shell, the National Gas Company and bpTT to unitise trains two, three and four into a single train.
The Government had announced the plan to have a single LNG train facility and that it had signed a Heads of Agreement (HOA) with the multinationals and the state-owned company, but it has never told the country the terms of the agreement.
The Business Guardian has, however, received a copy of the HOA and it shows that the Government has agreed to the three-train facility.
In the HOA, the Government identified one of its main objectives as being, “the sustained operation of the unitised facility as a three-train facility.”
T&T has four LNG trains.
The Business Guardian has also learnt that in the process, Chinese investors in Train 1 are out and NGC’s shareholding in the restructured entity will not be affected by the closure of Train 1. This was confirmed to the NGC by bpTT and Shell, the two major shareholders in Atlantic LNG.
In announcing the signing of the HOA, a release from the Ministry of Energy said, “The Atlantic LNG facility comprises four (4) LNG Trains, each with different shareholder structures and commercial arrangements. It was agreed that the Atlantic LNG facilities would be managed more efficiently if brought under the framework of a single ownership structure.” Giving the impression that the restructuring involved all four trains when it knew fully this was not on the table ...
The HOA is effectively the final nail in the Train 1 saga, which has seen more than a quarter billion of taxpayers’ dollars wasted by the NGC in a failed attempt to revive the facility. Train 1 has been shut now for more than a year and the NGC’s effort resulted in directors of the company seeking to be protected from being held liable for the losses by seeking an indemnity from corporation sole for loss of the money.
Further, the Government, led by the Prime Minister Dr Keith Rowley and the Minister of Energy Stuart Young, have consistently said Train 1 is not yet dead and was subject to negotiations. The HOA now shows that both Rowley and Young are aware that Train 1 is no more.
This means that the country has lost a quarter of its LNG capacity and will now have to live in the long term with lower LNG exports, even though the returns per molecule of natural gas could be better depending on the outcome of the final negotiations.
On Monday, the Prime Minister, flanked by his Gary Sobers, Energy Minister Stuart Young, announced what this newspaper told the country months ago and which for some inexplicable reason, the Government refused to confirm - that we are in a situation where the gas was simply not available for Train 1 and as a result, it has to be shut down.
Dr Rowley told a news conference, “We have four LNG plants, Train 1, which is the oldest one, came to the end of its contract life recently and has been shut down, mothballed, largely because there isn’t enough gas to run four trains. That leaves us with three trains.”
I am glad that the Prime Minister has finally come out and admitted to the country what is the state of play. I suspect that his reluctance to do so in February 2022 was a concern that it would compound how poor the decision of the Board and Management of the National Gas Company was, to throw away a quarter billion dollars behind a scheme to restart Train 1, betting that the petrochemical producers would not want access to their contracted quantities of gas, and somehow imagining that the depressed petrochemical market of early 2021 would remain so for a long time.
If ever there was a risky venture, this was one and as could have been predicted, the NGC and taxpayers lost a quarter billion dollars; it simply went down the drain. No one is held to account, the very Prime Minister defended the board and management of the NGC, those who opposed the scheme were removed from the board and the country moved on because as the PM himself lamented, many people in T&T do not keep a close eye on what is happening in the energy sector.
It is sad that we have come to this, that we have put off telling the country the truth for months and even in doing so, it is said in such a way that the media could have and easily missed the significance.
What was not missed is the reality that we are not just at an inflection point but on the brink of crisis. For years, this column has sought to warn the country of the real challenges facing the energy sector and the impact of the inertia of this Government.
The Minister of Everything and the Minister of Finance led the charge in seeking to attack the Business Guardian, ably assisted by their helpers on Facebook Live, but the truth always comes to the fore and I am glad that the PM has seen the moment of reckoning is here.
We must build a country where the Government trusts its citizens to dialogue on issues, at times accepting that it does not know it all, to come down from there, and understand that advice from any quarter should be filtered and considered.
No one challenges the Rowley administration’s right to govern the country, but it will do well to level with the public and not hide behind the notion that it knows all because it is seized with information that no one else has. That is only good for self-gratification and never see come see governance.
We need a government and a society willing to accept ideas and interests, even when they are at variance with our own world view. That is the only way we will make T&T stronger.
The battle has been joined and I urge the Government to not see people who don’t agree with what it is doing as enemies, or that only the views of supporters should be considered. What it must always put first is T&T’s interest. If we do that, we will get out of the crisis.