Higher LNG exports to US in 2003

TRINIDAD AND TOBAGO’s LNG exports into the United States for 2003 have surpassed those for 2002 and the stage is set for further progress in 2004. This early New Year’s Day present to TT was revealed by Energy Minister Eric Williams during a news conference at Riverside Plaza yesterday. Williams disclosed that while TT’s LNG exports to the US for 2002 were of the order of 66 percent, this year’s LNG exports to the US are “likely to be 70 and a little more percent.” The minister said while LNG today is a mere one to two percent of the natural gas used in the US, “that is expected to grow to the order of 15 percent in the next 20 years” and the future of TT’s LNG exports to the US market was therefore very bright. Williams said these developments support Government’s strategy “to seek the interest of the people of TT while ensuring security of supply to the profitable LNG market.”

He added that these efforts would be buttressed by a Memorandum of Understanding signed between TT and Venezuela in August which will see natural gas from the South American republic being processed into LNG in TT. Williams explained it was Government’s policy to move away from “collecting economic rent at the well-head to involvement along the entire LNG value chain” in order to create opportunities for the development of the people of TT. The minister said Government’s other natural gas-related initiatives such as an aluminium smelter and downstream methanol and ammonia ventures remain very much on the cards.

Asked whether Government would suffer any liabilities regarding a December 27 LNG shipment to the Elba Island regasification, given its decision to grant conditional approval to British Gas to Point Fortin LNG Exports Ltd and Trinling (BG and Chevron Texaco) to assign El Paso Merchant Energy’s (EPME) to BG, the Minister replied: “Those are essentially teething pains. Any exposure to liability in the first or the first few shipments in a 20-year contract are miniscule. The commercial arrangements are being worked out and we are likely to come to a satisfactory conclusion in the shortest possible time. There are no guarantees in life or in the energy business.” Under the agreement, Government gets 60 percent of the profit gas. Based on a Henry Hub price of US$4 per MMBTU, a single cargo of LNG is worth US$12 million. Williams said one of the terms of Government’s conditional approval was BG remove shipping penalties in relation to late delivery of LNG cargoes and “negotiations are to be completed by the end of the first quarter of 2004.”