Express Business Filler #1

Shell Trinidad and Tobago yesterday announced the start of natural gas production from its Block 5C, off the east coast of Trinidad, which it expects to peak at about 220 million standard cubic feet per day (mmscf/d).

Shell’s announcement of first gas from Block 5C, known as the Project Barracuda, comes amid heightened interest in the fate of Atlantic LNG’s Train 1, following reports that the first LNG facility in T&T, commissioned in 1999, will be mothballed “in the coming weeks and could stay out of service for at least two years”.

Train 1 is owned by Shell (with 46 per cent); BP (34 per cent); wholly State-owned National Gas Company (ten per cent) and the China Investment Corporation (ten per cent). Although BP owns 34 per cent of Train 1, it was contracted to supply 100 per cent of the gas to the facility until its 20-year agreement ended in March 2019.

In a response to an Express article on Monday, in which it said there was no ongoing fight with Shell, BP said: “While we continue to progress our Matapal and Cassia C projects, the volumes from these developments will be put towards fulfilling our existing contractual obligations for Trains 2, 3, 4 and NGC.”

That statement made it clear that BP does not intend to supply gas to Train 1.

In a December 2018 news release, BP said Mata­pal would have a production capacity of 400 million mmscf/d and is expected to produce first gas next year. In July 2019, BP said the Cassia C (Compression) platform “will have a throughput capacity of 1.2 billion standard cubic feet of gas (bcf/d).” Cassia C is expected to start production in the first half of 2022.

In its statement yesterday, Shell described first gas from Project Barracuda as “a significant milestone in the delivery of gas both domestically and internationally through Atlantic LNG”.

Royal Dutch Shell’s director of integrated gas, renewable and energy solutions, Maarten Wetselaar, said in the statement: “Today’s announcement strengthens the resilience and competitiveness of Shell’s position in Trinidad and Tobago.

“This is a key growth opportunity that supports our long-term strategy in the country as well as our global LNG growth ambitions.”

While it reported yesterday Project Barracuda’s 220 mmscf/d of gas at peak in the context of Atlantic LNG, Shell declined to state which of the four LNG ­facilities would get the gas.

A Shell spokesperson said: “Given that we are in closed period, we are not in a position to respond at this time.” A closed period for a public company is the time between the completion of a listed company’s financial results and the announcement of those results.

Shell also said yesterday that it looks forward to the delivery of the four-well development project in Block 22 and NCMA 4, known as the Colibri project. Colibri is a joint venture with Heritage Petroleum Company, from which first gas is expected in 2022.

Rowley: Train 1 talks ongoing

Yesterday, at a post-Cabinet news conference in Tobago, Prime Minister Keith Rowley was asked about the future of Atlantic LNG, given the concerns about the future of Train 1 and the fact that the natural gas supply contracts for Trains 2, 3 and 4 are due to be renegotiated by 2025.

Rowley said Trinidad and Tobago, as a gas producer, is in the competitive world of selling natural gas to the LNG plant and the plant selling to the world.

“And therefore contracts involved here are huge in terms of value of money, but the confidentiality of the negotiations are important assets. One cannot conduct these negotiations, such sensitive and far-reaching negotiations, on the front page of the newspaper, otherwise you would disadvantage the population of Trinidad and Tobago.

“Suffice to say that these negotiations are going on where they have to go on and have gone on where they were supposed to. And currently, particularly with respect to Trains 1 and 2, in Train 1 in particular, we are engaged currently in sensitive negotiations with all the shareholders.

“So, I am not prepared to say anything more than that. At the appropriate time, when there is something that we can say that does not jeopardise our interests, rest assured that you will be told because we in this country have open arrangements and the Government has nothing to hide.”

Energy Minister Stuart Young posted a tweet congratulating Shell on its first gas from Barracuda, saying the Government “continues to work to ensure future gas production and supply for T&T”.

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