British Gas Trinidad and Tobago Ltd. (BGTTL) may get an earlyChristmas present. It has asked FERC to issue a preliminarydetermination (PD) on Southern LNG Inc.’s proposal to recommissionits liquefied natural gas terminal facility at the Dec. 15 regularmeeting. FERC has placed the project on the agenda — so BGTTL ishalfway there — but whether it will issue a PD is quite anothermatter.
If the Commission should fail to award a PD at its meeting nextweek, not only would the future of Southern LNG’s recommissioningof its Elba Island, GA, terminal be in jeopardy, but it wouldthwart an LNG expansion project overseas and the development ofextensive gas reserves, according to an official with BGTTL.
BGTTL has a vested interest in the outcome of the FERCproceedings because its affiliate, British Gas Trinidad LNG Ltd.,is a shareholder in Atlantic LNG Co. of Trinidad and Tobago, whichowns the liquefaction facility in Trinidad that would supply LNG tothe Southern LNG terminal. Moreover, another BGTTL affiliate is apartner in a consortium that would produce the natural gas to beliquefied by Atlantic LNG and shipped to Southern LNG.
Based on a favorable PD on Dec. 15, Atlantic LNG plans toproceed with an expansion of its Trinidad LNG facility, and theconsortium — known as the NCMA Developers — plans to developthe offshore natural gas fields in the North Coast Marine Area,which has proven gas reserves of about 2 Tcf, the BGTTL officialtold FERC in a Dec. 7 letter [CP99-579]. “The economics for thisproposed LNG expansion project depend upon sales of LNG to bothU.S. and Spanish markets. Either market alone would be insufficientto support [it].”
In order to retain the Spanish portion of the market, BGTTL andother project sponsors must finalize their investment commitmentsin the upstream LNG expansion project this month, the officialnoted. But a favorable PD is needed first, he said.
“Any delay in the issuance of the preliminary determinationbeyond the Dec. 15 meeting date may result in the termination ofthe LNG purchase agreements for Spain. With the project economicsdependent on two LNG markets, the loss of the Spanish market couldlead to the termination of the entire LNG expansion projectincluding the significant offshore gas development.”
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