Asha Javeed

Lead Ed­i­tor—In­ves­ti­ga­tions

asha.javeed@guardian.co.tt

Ni­Quan En­er­gy chair­man John An­drews has asked the Gov­ern­ment to ho­n­our the “sanc­ti­ty-of-con­tract” which ex­ist­ed be­tween the com­pa­ny and the State’s spe­cial pur­pose com­pa­ny, the Trinidad and To­ba­go Up­stream Down­stream Com­pa­ny Lim­it­ed (TTUDEO­CL).

This, he said, will al­low the com­pa­ny, which has in­vest­ed over US$250 mil­lion from lo­cal and in­ter­na­tion­al fi­nanciers, to ful­ly op­er­a­tionalise its Gas to Liq­uids (GTL) plant based at Petrotrin’s com­pound at Pointe-a-Pierre and even­tu­al­ly pay its debts.

An­drews makes the re­quest in a two-page state­ment pub­lished in to­day’s news­pa­per, fol­low­ing a Sun­day Guardian ex­clu­sive which re­port­ed that the plant was now of­fline and its fu­ture at risk as it was knock­ing on its in­vestors’ doors for ur­gent fund­ing last week.

The state­ment did not ad­dress re­ports on the state of the plant, its fi­nanc­ing, debt or the fu­ture of its em­ploy­ees. In­stead, it ex­tend­ed an olive branch to the Gov­ern­ment, as it ad­dressed the pur­pose of the plant, re­mind­ed Gov­ern­ment of its sup­port for it in T&T’s land­scape and ap­pealed to them for nat­ur­al gas.

An­drews not­ed that part­ner­ship with the Gov­ern­ment is fun­da­men­tal to any en­er­gy project in T&T.

“We ask for no spe­cial treat­ment—just sanc­ti­ty-of-con­tract, mu­tu­al re­spect, and ac­tions which will reap mu­tu­al ben­e­fits for our coun­try, its peo­ple, and our en­er­gy in­dus­try. Please be as­sured that the plant re­quires 0.8 per cent of Trinidad and To­ba­go’s dai­ly nat­ur­al gas pro­duc­tion. And that the plant is ready for pro­duc­tion, once gas-sup­ply re­sumes,” An­drews said.

He claimed Ni­Quan did not breach its fi­nan­cial com­mit­ments to the TTUDEO­CL.

“Ni­Quan is not in breach of its fi­nan­cial con­trac­tu­al oblig­a­tions with its gas sup­pli­er. The Ni­Quan con­tract stip­u­lates that pay­ments are not due to its sup­pli­er un­til the plant achieves Com­mer­cial Op­er­a­tions Date. “Fac­tu­al­ly, Ni­Quan made nu­mer­ous at­tempts to ar­rive at an am­i­ca­ble res­o­lu­tion but were even­tu­al­ly con­strained to seek reme­dies, some of which are cur­rent­ly be­fore the courts and there­fore be­yond fur­ther com­ment,” the state­ment said.

On Au­gust 14, TTUDEO­CL ter­mi­nat­ed its con­tract with Ni­Quan En­er­gy. It had pre­vi­ous­ly in­voiced the com­pa­ny for sums owed to it—US$21 mil­lion for nat­ur­al gas—and used the ter­mi­na­tion clause of 30 days with­out pay­ment in its con­tract to end the agree­ment.

Ni­Quan sought in­junc­tive re­lief at the court but on Au­gust 21, Jus­tice Kevin Ram­cha­ran de­nied it an in­junc­tion to com­pel the State to sup­ply nat­ur­al gas to the plant.

At present, Ni­Quan has no nat­ur­al gas con­tract in place for the plant and as a re­sult, the plant has ground­ed to a halt at this time.

Ni­Quan’s le­gal bat­tle with the State was premised on sanc­ti­ty-of-con­tract.

In a state­ment to the Sun­day Guardian on Sep­tem­ber 1, Ni­Quan said it filed an ap­peal no­tice “seek­ing to re­verse the de­ci­sion of the High Court of Trinidad and To­ba­go to de­ny its re­quest for in­ter­im manda­to­ry and pro­hibito­ry in­junc­tions and de­clara­to­ry re­lief” to com­pel TTUDEO­CL to sup­ply it with nat­ur­al gas.

“The con­tract re­quires the Gov­ern­ment to sup­ply gas to Ni­Quan in or­der to main­tain pro­duc­tion at the GTL clean en­er­gy fa­cil­i­ty. Con­tract terms spec­i­fy the gas will be sup­plied on a guar­an­teed ba­sis not sub­ject to avail­abil­i­ty of gas or cur­tail­ment, and from sources oth­er than the Na­tion­al Gas Com­pa­ny (‘NGC’),” Ni­Quan said.

Ni­Quan not­ed in its state­ment that nat­ur­al gas for the plant was sup­posed to come from the Min­is­ter’s Share of nat­ur­al gas.

“In each block, there is a share in the min­is­ter’s name which can vary up to 20 or 30 per cent,” for­mer en­er­gy min­is­ter Franklin Khan had said, which were found in “var­i­ous pro­duc­tion shar­ing con­tracts.”

When it filed its ap­peal of the judg­ment, Ni­Quan told the Sun­day Guardian, “Ni­Quan’s ac­count with Trinidad and To­ba­go Up­stream Down­stream En­er­gy Op­er­a­tions Com­pa­ny Lim­it­ed (“UD”) was ful­ly paid up to the 6th April, 2023. All oth­er amounts claimed by UD are ei­ther not due and payable or oth­er­wise in dis­pute.”

Ni­Quan did not state how much was paid.

In court fil­ings ob­tained by Guardian Me­dia, TTUDEO­CL’s af­fi­davit said: “In any event, TTUDEO­CL is not in a po­si­tion to sup­ply gas in the amounts sought in the No­tice of Ap­pli­ca­tion. Due to Ni­Quan’s fail­ure to pay for gas sup­plied by TTUDEO­CL, TTUDEO­CL has been un­able to pay NGC and NGC is un­will­ing to sup­ply to TTUDEO­CL un­til the debt has been liq­ui­dat­ed.”

Ac­cord­ing to the con­tract, Ni­Quan’s “floor price (“Floor Price”) payable for the gas pur­chased pur­suant to this agree­ment shall be US$3.60 per MMB­TU from 2020 to 2031 in­clu­sive and US$5.50 per MMB­TU from 2032 to 2036. Such Floor Price shall be ef­fec­tive Jan­u­ary 1, 2020, and shall es­ca­late at 2.5 per cent on Jan­u­ary 1, 2023 and each con­tract year there­after.”

Ac­cord­ing to let­ters to TTUDEO­CL, Gill has missed his own pro­ject­ed date of com­mer­cial op­er­a­tional­i­sa­tion of Au­gust 2022.

Com­pa­ny’s track record

In his state­ment, An­drews said Ni­Quan has cer­tain­ly met one of its oblig­a­tions to its in­vestors and fi­nanciers.

“We have a proven plant that has pro­duced over 15,000 bar­rels of the clean­est trans­porta­tion fu­els which the world needs and Trinidad and To­ba­go can use,” he said.

“With the plant so proven, our con­fi­dence is now placed in the Gov­ern­ment to do their part and pro­vide the re­quired gas sup­ply so that we can have car­goes of prod­uct to sell and in­come to pay­back our in­vestors, fi­nanciers and the ven­dor com­mu­ni­ty.

“As found­ing chair­man of a board com­prised of ful­ly dis­tin­guished, out­stand­ing Trin­bag­on­ian fel­low-pa­tri­ots, a man­age­ment and staff ded­i­cat­ed to the re­al­i­sa­tion of a pa­tri­ot­ic vi­sion and mis­sion, I can as­sure you that our com­pa­ny is not about con­flict and con­tention, nor dis­agree­ment with po­lit­i­cal en­ti­ties in Gov­ern­ment and Op­po­si­tion, nor dis­con­nec­tion from our in­vestors and fi­nanciers—all pos­tures which no one’s in­ter­est.

“As with all busi­ness en­ti­ties in the en­er­gy in­dus­try, Ni­Quan ex­pects par­i­ty in all its trans­ac­tions en­tered in­to, and all treat­ments re­ceived.”

He said a part­ner­ship with the Gov­ern­ment is fun­da­men­tal to the com­pa­ny’s goals.

“The com­bined fore­sight and for­ti­tude of our in­vestors is an in­di­ca­tion of the con­fi­dence they place in our vi­sion. Bring­ing the plant to pro­duc­tion was ex­cit­ing, and re­as­sur­ing proof of our com­mit­ment to pro­tect­ing share­hold­ers and grow­ing the en­er­gy land­scape of Trinidad and To­ba­go,” he said.

The di­rec­tors of Ni­Quan En­er­gy, as at the com­pa­nies 2022 an­nu­al re­turn stamped on Au­gust 15, 2022, are: John An­drews, Al­i­son Lewis, Nicholas Galt, Lar­ry Fe­lix and Gill.

On Ju­ly 30, the Sun­day Guardian ex­clu­sive­ly re­port­ed that Ni­Quan had over US$250 mil­lion (TT$1.7 bil­lion) in debt and was strug­gling to meet pay­ments to the tune of mil­lions owed to con­trac­tors.

Ni­Quan was set to re­fi­nance its bonds in the sum of US$300 mil­lion (TT$2 bil­lion) by Ju­ly 31 but the ac­ci­dent at its plant on June 15, which sub­se­quent­ly re­sult­ed in the death of 35-year-old pipe-fit­ter Al­lan­lane Ramkissoon, set it back.

The com­pa­ny has been un­able to re­fi­nance its fa­cil­i­ty and in­ter­est on the debt has been ac­cru­ing.

In 2018, when Ni­Quan ac­quired the plant, Petrotrin re­ceived a cash pay­ment of US$10 mil­lion, with the re­main­ing US$25 mil­lion paid in pref­er­ence shares.

Ni­Quan owes hun­dreds of mil­lions to fi­nanciers in T&T—among them banks, cred­it unions and in­vest­ment com­pa­nies. Even the Gov­ern­ment, through Petrotrin, has pref­er­ence shares in Ni­Quan.

Ni­Quan raised mon­ey on the in­ter­na­tion­al bond mar­ket, loans and sums from lo­cal in­vestors, which in­clude Re­pub­lic Bank Lim­it­ed, RBC Trust (Trinidad and To­ba­go) Lim­it­ed, Bea­con In­sur­ance Com­pa­ny, First­line Se­cu­ri­ties, Prime Cap­i­tal Lim­it­ed, JMMB Se­cu­ri­ties Lim­it­ed, Wa­ter­loo Cap­i­tal Ad­vi­sors, KCL Cap­i­tal Mar­ket Bro­kers Lim­it­ed, In­shal­lah In­vest­ments, Farm Chem En­gi­neer­ing Man­age­ment Lim­it­ed, GM Homes Lim­it­ed, M&J Ser­vices Lim­it­ed, Cen­tral Fi­nance Fa­cil­i­ty Co­op­er­a­tive So­ci­ety of Trinidad and To­ba­go Lim­it­ed, Petrotrin and Wash­ing­ton DC reg­is­tered, Ni­quan En­er­gy LLC.