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This article was first published on Rigzone here
The Government of Trinidad and Tobago has signed heads of agreement with the shareholders of the Atlantic LNG project which will advance restructuring plans for the project.
According to the Ministry of Energy and Energy Industries of Trinidad and Tobago, this agreement comes after months of discussions and complex negotiations as the parties work towards a restructuring of Atlantic LNG.
China Investment Corporation (CIC) which has an equity interest in Atlantic LNG Train 1 is not actively participating in the restructuring of Atlantic LNG but has been having discussions with shareholders and the Government.
In 2018, the Government initiated discussions with the country’s major gas producers BP Trinidad and Tobago and Shell Trinidad and Tobago Limited on gas-related issues.
An outcome of the negotiations with BP and Shell was an agreement by the parties to explore the restructuring of Atlantic LNG.
The Atlantic LNG facility comprises four LNG trains with a total capacity of about 15 million tons per annum of LNG, each with different shareholder structures and commercial arrangements. It is a major contributor to the economy and a catalyst in the development of the country’s natural gas resources. Although, the facility has had supply issues due to diminishing domestic gas reserves.
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It was agreed that the Atlantic LNG facilities would be managed more efficiently if brought under the framework of a single ownership structure.
To attempt to restructure the shareholding and other commercial arrangements is unprecedented and involves many sensitive details at a time when the global energy landscape can be volatile,” the Ministry said.
In March 2019 the shareholders of Atlantic LNG signed a letter of intent affirming their willingness to discuss the restructuring with the Government. In February 2020 the shareholders submitted a proposal to the Government to begin negotiations on a Heads of Agreement which would be followed by definitive agreements.
The Ministry claimed that the Heads of Agreement have finally been reached, following intensive negotiations.
BP, Shell, and NGC have committed to continue with discussions that would lead to Definitive Restructuring Agreements for the project. The proposed date for completion and execution of the definitive agreements is June 30, 2022.
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