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Favorable PD on Southern LNG Critical, Say Foreign Suppliers

Favorable PD on Southern LNG Critical, Say Foreign Suppliers

British Gas Trinidad and Tobago Ltd. (BGTTL) may get an early Christmas present. It has asked FERC to issue a preliminary determination (PD) on Southern LNG's proposal to recommission its liquefied natural gas terminal facility at this Wednesday's meeting. FERC has placed the project on the agenda --- so BGTTL is half way there --- but whether it will issue a PD is quite another matter.

If the Commission should fail to award a PD at its meeting this week, not only would the future of Southern LNG's recommissioning of its Elba Island, GA, terminal be in jeopardy, but it could thwart an LNG expansion project overseas and the development of extensive gas reserves, according to an official with BGTTL.

BGTTL has a vested interest in the outcome of the FERC proceedings because its affiliate, British Gas Trinidad LNG Ltd., is a shareholder in Atlantic LNG Co. of Trinidad and Tobago, which owns the liquefaction facility in Trinidad that would supply LNG to the Southern LNG terminal. Moreover, another BGTTL affiliate is a partner in a consortium that would produce the natural gas to be liquefied by Atlantic LNG and shipped to Southern LNG.

Based on a favorable PD on Dec. 15, Atlantic LNG plans to proceed with an expansion of its Trinidad LNG facility, and the consortium-known as the NCMA Developers-plans to develop the offshore natural gas fields in the North Coast Marine Area, which have proven gas reserves of about 2 Tcf, the BGTTL official told FERC in a Dec. 7 letter [CP99-579]. "The economics for this proposed LNG expansion project depend upon sales of LNG to both U.S. and Spanish markets. Either market alone would be insufficient to support [it]."

In order to retain the Spanish portion of the market, BGTTL and other project sponsors must finalize their investment commitments in the upstream LNG expansion project this month, the official noted. But a favorable PD is needed first, he said.

Susan Parker

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