The Honourable Stuart R. Young, M.P., Minister of Energy and Energy Industries and Minister in the Office of the Prime Minister is pleased to announce that the Ministry has reached agreement with the Atlantic LNG (Atlantic) shareholders on substantiative commercial terms for the revised structure of the Atlantic LNG venture. This follows the signing of a Heads of Agreement in January 2022.
The milestone is the culmination of discussions that the Government of the Republic of Trinidad and Tobago initiated in 2018 with major Atlantic shareholders, following which the parties agreed that the Atlantic facilities and its complex shareholder structure and commercial agreements needed to be simplified.
The Government and Atlantic shareholders (inclusive of companies affiliated with BP Trinidad and Tobago, Shell Trinidad and Tobago Limited, and The National Gas Company of Trinidad and Tobago Limited), have agreed on a restructured ownership and commercial framework to see the Atlantic business operations consolidated into a single entity.
In the revised structure, NGC will increase its equity share in Atlantic, consistent with the commitment by the Government to maximise value to the country from the sale of hydrocarbon resources. The new construct will also facilitate a market-reflective pricing mechanism that provides fair value from the sale of LNG for both the country and the shareholders.
Subsequent consultations and intensive negotiations between the Government and the shareholders resulted in the signing of a Heads of Agreement in January 2022, followed by an agreement on the commercial terms, the first of which was signed today to enable the finalization of the simplified entity.
For the Atlantic facility, the restructured ownership and commercial framework will allow for an intensified focus on operational efficiency and reliability; and for the upstream suppliers, it will provide the clarity necessary for sanctioning the next wave of upstream gas projects.
Atlantic LNG remains a world-class exporter in the increasingly competitive LNG global market and is a key enabler for the production and export (monetization) of the country’s natural gas resources. The agreement is, therefore, a significant step forward to securing the long-term viability of the LNG business in Trinidad and Tobago.
These commercial terms will be reflected in fully termed agreements, with final and binding agreements to be effective from October 2024.