Atlantic LNG, the largest exporter of liquefied natural gas (LNG) to the United States, resumed shipments Wednesday from Trinidad and Tobago, following the conclusion of a two-day strike by tugboat workers over wages.

Meanwhile, contractors developing a fourth liquefaction train continued their strike in an effort to pressure the government into increasing the minimum wage for energy workers. Train 4 is scheduled to start up in 2006 with a capacity of 800 MMcf/d, which will raise Trinidad’s export capacity to more than 2 Bcf/d.

Atlantic LNG’s three liquefaction trains currently produce about 1.7 Bcf/d for delivery to the United States, Spain, Puerto Rico and the Dominican Republic. About 1 Bcf/d is imported by the United States and much if it goes to Tractebel’s import terminal in Everett, MA. Atlantic also exports LNG shipments to Dominion’s Cove Point, MD, terminal, El Paso’s Elba Island terminal near Savannah, GA, and Southern Union’s Lake Charles terminal in Louisiana.

Although LNG remains a small portion of overall U.S. gas supply (1.4 Bcf/d in 2003 compared to 53 Bcf/d of domestic dry gas production), it provides a significant supply alternative to New England and the Mid Atlantic. The Energy Information Administration expects net LNG imports to rise to 1.75 Bcf/d this year and 2.06 Bcf/d in 2005, with Trinidad making up a large portion of those totals.

Utilities in the Northeast have been relying on LNG deliveries as an important supplement to their overall supply mix. The resumption of Trinidad LNG exports is a key development in the market at the end of this winter when there has been a significant focus on storage levels, said one market observer.

“I believe the utility companies do not want to see storage levels get as low as they have in recent years so a lot of them are injecting right now while the weather is mild and are trying to do it quietly. The net withdrawal numbers are going to look small this week because of the heavy injections that are going on right now. But the tugboat problem in Trinidad takes off 1 Bcf/d, most of which was going directly into storage. You take that away and utilities have to go out and replace it with spot purchases, which drives up cash prices.” Without Trinidad LNG in the mix for a week, he speculated that cash prices would rise and remain high for up to two months.

Atlantic LNG’s five partners are the National Gas Company of Trinidad and Tobago, BP , BG Group PLC, Repsol , and Tractebel.

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