Who will have the final say when it comes to the destiny of Atlantic LNG’s train one?
That’s the billion-dollar question which emerged this week when reports about the possible mothballing of the facility were reignited, amid concerns over an impasse between key corporate stakeholders.
From the outside, the situation would appear both exceedingly simple and exceedingly complex.
Train one began operations in 1999, the first of its kind in the western hemisphere. It has long been a source of national pride, at least within the energy sector. It is one of four trains that shipped LNG to foreign markets.
However the train, which in the past generated millions in tax revenue for the State, has been idle since November 2020 because of the unavailability of natural gas. Last year, the Government assured the facility would be kept operational and that talks to source gas were ongoing. So complex have those talks been that the matter has straddled two successive ministers of energy.
In 2020, Franklin Khan, now deceased, told Parliament sensitive negotiations were happening. Mr Khan’s successor, Stuart Young, this week informed the country talks remain “ongoing” and “at a very sensitive stage”.
Meanwhile, in order to keep options open, the National Gas Company (NGC), owning 10 per cent of the train, took on the responsibility of maintaining it despite not having enough natural gas to make it useful.
In February, NGC chairman Conrad Enill invited the country to see whatever has been spent by NGC in turnaround costs – and this should be disclosed – as part of maintaining an enabling environment for upcoming projects or inflows rather than a short-term investment.
While we have been invited to look at the picture from a long-term perspective given that it would take about eight years to resume a new facility, people like former energy minister Carolyn Seepersad-Bachan see train one as a lost cause. She has called on the State to move on.
The State is clearly not ready to. Considerable effort has been expended in keeping all options open. It has been suggested that NCG has invested between $250 million to $300 million on this endeavour.
Questions also surround the shareholding arrangements in relation to the train, with ownership somewhat divorced from supply capacity. This has left room for the perception of tensions. That as much is confirmed by the fact that this has been a bugbear at least since last year when Mr Khan hinted in Parliament that a key issue in negotiations was the desire to form one unitised facility encompassing all four trains.
What’s at stake is the ability of the Government to keep its promises and to ensure that it is the State that has the biggest say over key assets. Companies involved have denied infighting but certainly their commercial interests are not fully aligned with that of each other's and the country’s.
Whether the NGC gambit pays off or not, Government will soon have to tell us which way the train is going.