TT$210M FOR GAS PIPING

The National Gas Company of TT (NGC) yesterday signed a US $38 million financing agreement with the German ING BHF Bank to finance the supply of piping from German manufacturer Europipe. This will facilitate the construction of 76 kilometres of 56-inch offshore pipeline from Beachfield to Point Fortin at an estimated cost of US $260 million.

This pipe laying project is one of many NGC plans to undertake for the period of 2003 to 2004 at a total cost of US $444.9 million or TT $2.8 billion. Other projects include the laying of a 36- inch offshore pipeline, budgeted at US $150 million; dredging works and the construction of a 150 metre dock and fabrication yard at La Brea Industrial Estate, as well as the extension of the Savonetta Pier II and the purchase of two tugs by the National Energy Corporation (NEC). NGC is expected to raise approximately 80 percent of the financing of this project, which amounts to US $355.9 million or TT $2.224 billion. Speaking at the signing ceremony, NGC chairman, Keith Awong, revealed that the 56-inch pipeline would provide gas to the Atlantic LNG Train 4 in addition to transporting natural gas for other downstream gas conversion plants in Point Fortin and Union Estate. The estimated capacity is expected to be 2.4 billion cubic feet of gas per day. “NGC’s responsibility at this time,” he stated, “is to finance, build, operate and maintain the line. “Eventually, this gas transmission pipeline will provide us with a new revenue stream since we will earn a transmission tariff from the supply of gas through the pipeline,” he added. Awong disclosed that NGC received its first shipment of pipe, comprising 6,500 pipe lengths, from Europipe more than six weeks ago. Pipe delivery is expected to continue to the end of 2003.

Thomas Schroeder, a representative of the ING BHF Bank revealed that the loan was guaranteed for eight-and-a-half years at a fixed interest rate of 4.2 percent in US dollars. It is also covered by the German export credit agency Hermes. Schroeder explained that the bank required the Hermes cover since banks were presently reluctant to take over unmitigated long-term credit risk. The Hermes cover also placed ING BHF  in the position to grant a loan at much more favourable rates than without such a cover, he added. Minister in the Ministry of Finance, Senator Christine Sahadeo, noted that the construction of this pipeline held several positive implications for Trinidad and Tobago since it was the first of its kind in the Western Hemisphere. Apart from the actual labour associated with the laying of the pipeline, she maintained, opportunities for the private sector would arise from the provision of the services including site surveying, geotechnical services, pipeline design activities, facilities detail design and non-destructive testing. There will also be further opportunities linked to welding activities, trucking and haulage, instrumentation and electrical and telecommunication services. Noting that the energy sector in TT was responsible for most of the country’s development, Sahadeo expressed her belief that there was little to suggest that this will change in the near future. “Revenues from the energy sector are used to fuel the growth of the economy,” she said. “It is imperative therefore that we continue to manage our energy resources to maximise the benefits for the people of TT.”