UNC Senator: Pt Lisas dead by 2018

Opposition Senator Caroline Seepersad-Bachan said technocrats in the Ministry of Energy were sounding alarm bells over the recent agreement for the Atlantic LNG Train Four, and she wants the Government to state its Gas Master Plan to reassure both this country and foreign energy-sector investors.

Speaking in the Senate on Tuesday evening, she warned that the agreement involves too many unknowns, including those entailed in the clandestine nature of the negotiations. Seepersad-Bachan wanted the Govern-ment to assure that the country had sufficient gas reserves to continue to attract foreign investors in the gas-based sector and to reassure that the country would amass adequate revenue from sale of its gas. Urging the Govern-ment to ensure the country has a high gas reserve-to-production ratio, and to “prove up” the existence of these resources, she warned: “There has been little or no exploration activity since 2001. Our deep water exploration programme has not been successful due to the fault of no-one. There has been no proving up of re-serves”. Moreso, she said, Train Four will consume one billion cubic feet of gas each day, with all LNG Trains using up 60 percent of our current proven reserves, threatening the gas-supply available to other investors in the gas-based sector.

Seepersad-Bachan said: “Our calculations show that the reserve-to-production ratio is expected to fall to below 15 years, meaning that with no new gas finds, our natural gas industry shuts down in 15 years. Imagine, within 15 years our whole natural gas processing sector can come to a halt...  “No banker will advise an investor to come to Trinidad and Tobago without a reserve-to-production ratio of at least 20 years. For the aluminium smelter they (Norsk Hydro) wouldn’t even start to talk to the Government of Trini-dad and Tobago without a reserve-to-production ratio of 30 years. Have we given up on the smelter and on the gas-to-liquid project?” She slammed the Government for signing for Train Four without getting a commitment from its LNG partners for an ethene (ethylene) plant, in contrast to the former UNC regime which, negotiating Trains Two and Three, had said it would not negotiate Train Four unless it got an iron-clad agreement for the ethene plant, with likely participation by the State through NGC and Petrotrin. Seepersad-Bachan said: “The only incentive for Train Four (for Trinidad and Tobago) was the ethylene plant, as it would have contributed significantly to the diversification and deepening of the downstream gas-based sector.”

On the question of local participation in Train Four, she lamented that only 40 percent of the plant’s structural steel was being made in Trinidad and Tobago. She asked whether head of the Train Four negotiating team, Prof Ken S Julien also headed a firm called Kenesjay, which she suggested might be the parent company of a firm called Asset Risk Engineering which a recent newspaper advertisement had said was doing a joint venture with Bechtel which has a contract to construct the Train Four plant. “Kenesjay is being awarded contracts for which there was no public notice — a serious conflict of interest...And the Government says it has no sacred cows!” She urged the Government to gets its LNG partners to help pay the cost (she estimated at half billion dollars) of re-locating Trinmar to accommodate the siting of Train Four, and to pay to restore the environment in south west Trinidad, especially at Clifton Beach.

Seepersad-Bachan told the Government to state whether the Train Four agreement in-volved a minimum guaranteed floor-price (to supplement the net back pricing agreement which links sale price to international market prices) to protect our revenues if the global price of natural gas falls to very low levels. She warned: “The $1.02 billion dollars estimated to be the Government’s take at the well-head, could become zero cents.” She criticised Prime Minister Patrick Mann-ing’s announcement that after 2017 the country would earn a 10 percent royalty rate on gas from the fields of bpTT, saying this had actually already been agreed during the Train One negotiations done under the UNC. As to Manning’s announement that the Government would not grant a tax holiday to Train Four, she said this was nothing new because the UNC government had not permited any tax holiday for Trains Two and Three. Saying the UNC had pressed bpTT to cut the price it sold its gas to NGC to supply gas-based industries (like methanol, urea and ammonia), Seepersad-Bachan asked if the Government, in the Train Four negotiations, had pushed any more gas-price reductions, to spur future down-stream gas-based projects.