Trinidad & Tobago eyeing equity stake in US LNG import facilities

By Curtis Williams
OGJ Correspondent

PORT OF SPAIN, July 9 -- Capitalizing on its status as the No. 1 US LNG supplier, Trinidad and Tobago is considering pursuing an equity stake in US LNG import facilities.

The government of the twin-island nation announced that it has entered into a memorandum of understanding with McMoRan Exploration Co. subsidiary Freeport-McMoRan Energy LLC, New Orleans, for the development of the company's proposed deepwater LNG terminal off Louisiana.

The Louisiana firm earlier this year filed an application with the US Coast Guard for authorization to develop a $440 million, deepwater LNG receiving terminal at its Main Pass energy hub, 37 miles east of Venice, La. (OGJ Online, Mar. 1, 2004).

Trinidad and Tobago Energy Minister Eric Williams said the MOU will establish the basis for technical teams from both the company and the government to continue their discussions and is part of his government's intention to get into all parts of the LNG value chain.
Williams said the facility will be located close to several major natural gas distribution pipelines. He added that the concept involves the storage of gas in underground salt caverns, which will allow for "a fair degree of flexibility in the marketing of gas."
He said that since the signing of the MOU there have already been initial meetings and that the project "continues to look quite positive."

Other projects considered
Williams added that talks were also continuing with a number of other interested promoters of regasification projects.
"We have received 12 proposals for partnership in new regasification terminal projects in the US," he said. "These have varied from specific written proposals to telephone discussions and visits to Trinidad and Tobago. The large number of companies seeking some form of alliances with our country reflects the attractiveness of the opportunity for establishing more regasification terminals in the United States of America and for sourcing secure supplies of LNG."

Speaking at a recent Latin American and Caribbean gas conference in Port of Spain, Williams said that other companies—including San Diego-based Sempra Energy LLC, Paris-based Air Liquide Group, and Excelerate Energy LLC, The Woodlands, Tex.—also have been holding discussions with the Trinidad and Tobago government on establishing regasification terminals in the US.
"We have also been holding discussions with Sempra, Air Liquide, and Excelerate and others that I can't mention for various reasons of confidentiality, but we are serious, and we are out there talking to folks;" headded.

Williams told the conference; " We are also aware that two other gas exporting countries also have been approached to be equity partners in the project. Our involvement in a regas[ification] project in the US is also part of the promise that Prime Minister Patrick Manning made to President George W. Bush when he told the president that Trinidad and Tobago will do what it can to ensure the security of supply of gas to the US."
Manning met last December with Bush in Washington, DC, to discuss, among other things, energy security.

No. 1 supplier
Trinidad and Tobago is the largest exporter of LNG to the US, accounting for 77% of the total amount of LNG exported to the US market last year.
Williams pegged those volumes at 10.6 million tonnes and noted, "For the first quarter of this year, LNG from Trinidad and Tobago has already amounted to 80% of the total US LNG imports."

The energy minister told the conference that Trinidad and Tobago already had three LNG trains, and all the production from the fourth is dedicated to the US market.
Williams said that, as part of his government's attempts to deepen its involvement in the LNG train, it also is seeking to buy into LNG shipping.
He said; "In addition, we are speaking with shipowners and shipbuilders because we intend to seek equity ownership in LNG shipping capacity as well as regas capacity."