$1.5B expected from Train 4

The Atlantic LNG Train IV Project, on which construction will commence in August, is expected to generate more than US$1.5 billion in revenue for TT through a combination of tax receipts from Atlantic, as well as royalty payments of proceeds from a production-sharing agreement.

So said Atlantic LNG President, Rick Cape, as he addressed a presentation to Private Sector Business Organisations entitled “Atlantic LNG Train 4 Project: Facts, Figures, Opportunities and Sustainability.”  The seminar, which was held at the Hilton Trinidad, was organised by the American Chamber of Commerce. According to Cape, approximately US$67 million per annum is expected to go to government through taxes on the liquefaction fee, while TT$8 million will go towards the Point Fortin Borough Corporation. He also revealed that the estimated capital cost of the plant, which is expected to be commissioned in August 2005, was set at US$1.2 billion. Between US$175 and $200 million will be spent locally for the construction of the Train, which will include a second jetty and a fourth storage bank. “The plant,” he stated, “is expected to be the world’s largest LNG Train, with a capacity of 5.2 million tonnes of LNG per annum.” It will also be 60 percent larger than the three previous Trains.

Additionally, Train 4 will see the employment of almost 2,500 employees while the previous Trains 2 and 3, which were constructed together, required 3,500 employees. In response to a question from TTMA President, Anthony Hosang, concerning the number of locals who would be employed, Cape revealed that  eight percent of 420 employees will be expatriates or foreigners. However, he noted that where the company’s administrative staff was concerned, TT nationals held a very small percentage. To rectify this, Atlantic was presently working on succession planning to get the expatriates rotated out of the company to be replaced by locals. “This is an active part of what I have in mind to develop as quickly as possible candidates for President who are TT nationals,” he said. Chairman of Atlantic LNG, John P Andrews explained that unlike Trains 1, 2 and 3, Train 4 has been structured as a processing entity which would charge a fee for the conversion of natural gas to Liquid Natural Gas (LNG). This fee, he stated, would cover all operating expenses and provide for the recovery of total capital expenditure over a 20 year period of operation with an approximate eight percent margin of profit. This would then be subjected to corporation tax. No tax holiday had been requested or granted for the Train 4 Project, he added.