PM Manning: Anti-bribery clause in Train Four agreement

PRIME MINISTER Patrick Manning yesterday announced that anti-bribery clauses are included in all agreements forming part of a contract signed last Thursday between Government and Atlantic LNG’s (ALNG) shareholders to begin construction of ALNG Train Four in August 2003. While informing Parliament that Train Four will see billions of dollars flowing into the nation’s coffers and numerous economic spin-off benefits, the Prime Minister said these clauses were inserted “to make the future of this country as secure as possible” and “will void the contract if improper payments are ever detected”.

Manning hailed the contract as “far superior to all other agreements so far achieved in the natural gas sector”, maximising “in an unprecedented manner” the returns to Trinidad and Tobago from the exploitation of its energy reserves. The Prime Minister said with a daily production capacity of 800 million cubic feet, Train Four will be the largest LNG train in the world and starting in 2008 will earn direct revenue of $1.02 billion annually for the contract’s duration, while Government’s total take at the well-head will average $1.07 million annually at an estimated US gas price of $3.50 per million british thermal gas units (btu). “If that gas price goes to $4.50, then that figure goes to $.183 million a year. Gas prices in the US are now of the order of $6.00 per million btu,” Manning added. He revealed that ALNG’s shareholders will have no tax holiday with all taxes being paid to the business levy, green levy, land and building and other corporate taxes. Manning said the latter are projected to exceed those from Trains Two and Three by 10 cents per million btu of LNG produced. He further disclosed that Bptt will provide a free supply of natural gas to Train Four from 2003 to 2017, after which a ten percent royalty rate comes into force. Manning explained that this will provide greater flexibility in the establishment of electricity-intensive industries such as an aluminum smelter, and revealed that Government is currently considering a major proposal in this regard.

The Prime Minister also said the agreement allows for 80 percent extraction of ethane from Train Four and coupled with ethane extraction from the other three trains will lay the foundation for an ethylene plant with an annual production capacity of 800,000 metric tonnes. Manning said employment in the construction of Train Four will peak at 2,400 persons next year and agreement has been reached for all construction and design work to take place locally and for there to be increased local added value on the project. He said the expanded ALNG plant will supply seven destinations (including the Dominican Republic and Puerto Rico), the NGC will build a 56 inch pipeline in support of the project and convert gas from Vermillion-Petrotrin’s onshore wells into LNG and a new company will be created within ALNG’s corporate structure to ensure full payment of taxation from Train Four’s revenues. However, no sooner had Manning taken his seat than Siparia MP Kamla Persad-Bissessar warned that the rosy picture he painted would come to nought if the ruling PNM continued with its alleged squandermania. She refused to allow Manning to interject on a point of order, saying he had cut into her speaking time to deliver his statement. “I will not give way,” Persad-Bissessar declared.