Gail ALexan­der

Se­nior Po­lit­i­cal re­porter

Prime Min­is­ter Dr Kei­th Row­ley will be go­ing to Lon­don next month to sign off on the agree­ment for the re­struc­tur­ing of At­lantic LNG.

Con­tribut­ing to the 2024 Bud­get de­bate in Par­lia­ment yes­ter­day, Row­ley said the re­struc­tur­ing of At­lantic LNG would take place in Lon­don some­time in No­vem­ber.

He said the sign­ing will be the cul­mi­na­tion of “...an out­stand­ing pe­ri­od of work for which I want to con­grat­u­late the En­er­gy Min­is­ter, his ad­vis­ers, the lawyers, ex­perts, our lo­cal and for­eign le­gal teams who have ne­go­ti­at­ed with those in­ter­na­tion­al com­pa­nies and out of it has come im­proved arrange­ments for the peo­ple”.

At­lantic has four trains, ac­cord­ing to its web­site, with three dif­fer­ent own­er­ship struc­tures:

• Train 1 is owned by Shell (51 per cent), BP (39 per cent) and NGC (10 per cent);

• Trains 2 and 3 are owned 57.5 per cent by Shell and 42.5 per cent by BP; and

• Train 4 is owned Shell (51.11 per cent), BP (37.78 per cent) and NGC (11.11 per cent).

Train 1 has been moth­balled be­cause its 20-year nat­ur­al gas sup­ply agree­ment came to an end in 2019.

The main pur­pose of the re­struc­tur­ing is to trans­form and sim­pli­fy the three dif­fer­ent own­er­ship struc­tures in­to a sin­gle uni­tised fa­cil­i­ty with a com­mon own­er­ship struc­ture.

The process for re­struc­tur­ing the LNG fa­cil­i­ty, which is lo­cat­ed in Point Fortin, start­ed in 2018, when Gov­ern­ment ini­ti­at­ed dis­cus­sions with the coun­try’s ma­jor gas pro­duc­ers BP Trinidad and To­ba­go LLC (bpTT) and Shell Trinidad and To­ba­go on nat­ur­al gas-re­lat­ed is­sues.

One ma­jor out­come of the ne­go­ti­a­tions with bpTT and Shell was an agree­ment by the par­ties to re­struc­ture At­lantic LNG, Row­ley said in a speech in De­cem­ber 2022.

In March 2019, the share­hold­ers of At­lantic LNG signed a let­ter of in­tent af­firm­ing their will­ing­ness to agree to dis­cuss with Gov­ern­ment the re­struc­tur­ing of At­lantic LNG.

In April 2020, the share­hold­ers sub­mit­ted a pro­pos­al to Gov­ern­ment to com­mence ne­go­ti­a­tions on a Heads of Agree­ment which was to be fol­lowed by de­fin­i­tive agree­ments. Fol­low­ing in­ten­sive ne­go­ti­a­tions agree­ment was reached on a Heads of Agree­ment (HOA).

On Jan­u­ary 25, 2022, the Gov­ern­ment and At­lantic LNG Share­hold­ers signed the HOA that out­lined the gov­ern­ing prin­ci­ples re­ferred to as the Gov­ern­ment Prin­ci­ples that will form the ba­sis of the De­fin­i­tive Re­struc­tur­ing Agree­ments for the re­struc­tur­ing of At­lantic LNG.

The Gov­ern­ment and the At­lantic share­hold­ers signed an amend­ed and re­stat­ed HOA on the re­struc­tur­ing of At­lantic LNG on De­cem­ber 6, 2022.

The re­struc­tur­ing of At­lantic will pro­vide op­por­tu­ni­ties for non-share­hold­er, third par­ty nat­ur­al gas pro­duc­ers to par­tic­i­pate in the liq­ue­fac­tion of the com­mod­i­ty at Point Lisas, said Row­ley in De­cem­ber 2022.

The re­struc­tur­ing is al­so ex­pect­ed to re­sult in a new pric­ing arrange­ment for the LNG sold by the uni­tised com­pa­ny.

“In 2018 we agreed with both bpTT and Shell on a pric­ing arrange­ment for LNG, the Train 1 FOB price. This pric­ing for­mu­la is based on three mar­ket re­flec­tive prices, name­ly 1/3 Brent, 1/3 Japan and Ko­rea Mar­ket (JKM) and 1/3 NBP (the UK bench­mark).

“It was fur­ther agreed that new mar­ket­ing arrange­ments would adopt this pric­ing as com­pared to Hen­ry Hub, on which most LNG mar­ket­ing arrange­ments were based, and to a less­er ex­tent the Span­ish mar­ket pow­er price,” said Row­ley ten months ago.