No secret energy deals by Manning

PRIME MINISTER Patrick Manning made no secret deal regarding the grant of conditional approval to British Gas Trinidad and Tobago (BGTT) where British Gas’ (BG) purchase of El Paso Merchant Energy’s (EPME) LNG contracts in the Elba Island regassification was concerned. Addressing a news conference at Riverside Plaza yesterday, Energy Minister Eric Williams said: “In this particular issue, there was no overnight decision with respect to the grant of conditional approval to BG. The chronology of the whole thing will make that very clear.” Williams recalled that on June 2, 2000, Point Fortin LNG Exports Ltd (PFLE) signed a 20-year contract to supply LNG from Atlantic LNG Trains Two and Three to Elba Island from June 8, 2003 and February 26, 2004 respectively.  PLFE’s shareholders are BGTT, Petrotrin, PetroCanada and ENI.

However, Williams said on February 5, 2003, EPME announced it would be restructuring its operations and “cease its activity in LNG.” The Minister explained that as a result of this, EPME decided to defer the start of commercial LNG sales to September 30, 2003 but in that same month, EPME asked to reschedule the contract’s commencement because its exit from merchant and trading activities in LNG had not been finalised. “On each occasion, all of the partners of PFLE as well as the Minister approved the rescheduling of the contract’s commencement,” he said. Williams said British Gas International Holdings was one of several companies negotiating with EPME to acquire the Elba capacity and in October 2003, EPME sought approval from PFLE to assign its contracts to BGGM and British Gas LNG Services (BGLS). An asset purchase agreement was signed between EPME and BGGM/BGLS on November 6, 2003 and was conditional on the consent of non-BG PLFE partners as well as other companies holding interests in the Elba Island capacity. Williams said given the imminent approach of the January 1, 2004 date for the start of LNG deliveries under the 20-year agreement, PLFE informed the Ministry that a decision had to be taken prior to the loading of a cargo scheduled for December 27, 2003 which will arrive at Elba Island on January 2, 2004.

He stated that on December 18, 2003, the non BG PLFE partners gave their approval to assignment of the contract to BGGM/BGLS “subject to the Minister’s approval” and PetroCanada prepared a consent form which was agreed to by the other PFLE partners. BGTT sought Williams’ approval on December 19, 2003 while he was “in transit” from the Global LNG conference in Washington DC. “After careful consideration of the mechanisms agreed to by the PFLE partners for managing BG’s conflict of interest, technocrats of the Ministry and the Natural Gas Export Task Force in consultation with Petrotrin submitted recommendations to the Minister of Energy. The Minister of Energy subsequently granted conditional approval to BGTT on December 24, 2003,” Williams stated. The Minister said given this chronology the Prime Minister “did not have to engage in any secret discussions at a dinner to deal with this issue” and he was not in England because he was in Washington “preparing the way” for Manning’s visit there which was a resounding success.