Amoco Corp. and Spain’s Repsol SA have made a proposal thatwould provide a guaranteed market for gas from Trinidad and Tobago,enabling the country to become one of the world’s top suppliers ofliquefied natural gas (LNG).

Repsol would commit to buy almost five million tons/year of LNGfrom Trinidad and Tobago for markets primarily in Spain over aperiod of 20 years. This would be in addition to LNG alreadycontracted for Spain from train 1 of the Atlantic LNG plant inTrinidad and Tobago set to begin operation in 1999 – with a totalthroughput of three million tons/year.

Amoco and Repsol are major shareholders in Atlantic LNG with 34%and 20% interests, respectively. Amoco is supplying all of the gasfor the first production unit and is positioned to supply gas toany further trains of LNG on the island, having discovered gasresources of 11 Tcf in the last four years.

With the guaranteed market for Trinidadian LNG, Amoco willprovide Repsol with the opportunity to purchase a 10% interest inits existing producing and exploration assets in Amoco Energy Co.of Trinidad and Tobago, with an option to increase its interest to30% in later years. The first opportunity is dependent upon gainingrequired approvals for additional LNG trains, including governmentapproval.

Spain is a major importer of LNG, and one of the fastest growinggas markets in the Atlantic Basin, with much of the growth tied toexpected new gas-fired power generation capacity. The Repsol groupis a leading player in the Spanish gas market-one of its affiliatessupplies about 90% of Spain’s gas market while another, Enagas, isthe buyer for 40% of Atlantic’s Train 1 volume.

“As well as strengthening our abilities to capture gas growthopportunities, further guaranteed markets for Trinidadian gas wouldenable Amoco to monetize its supplies there, adding shareholdervalue and providing substantial benefits to the country,” saidRebecca A. McDonald, Amoco Energy Development CEO. “The LNGexpansion proposal alone would bring to Trinidad and Tobago totalinvestment of about $3 billion and at least $6 billion in taxrevenue as well as significant employment opportunities over thelife of the project.”

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