Trinidad and Tobago seeks new partners to restart idled refinery

Trinidad and Tobago’s state-owned Trinidad Petroleum Holdings Ltd. (TPHL) has restarted its search for partners to help revive subsidiary Guaracara Refining Co. Ltd.’s (Guaracara) currently idled 175,000-b/d Pointe-a-Pierre refinery—the island nation’s only—which ceased processing activities in late 2018 amid the government’s restructuring of former operator Petroleum Co. of Trinidad and Tobago Ltd. (Petrotrin) (OGJ Online, Nov. 6, 2018).

Companies interested in participating in the bidding process are invited to contact Scotia Capital (USA) Inc. (Scotiabank), TPHL’s exclusive financial advisor for the proposed transaction, via e-mail by July 23, TPHL said.

Interested parties or consortia determined to possess the requisite expertise for restarting the refinery subsequently will be provided with an initial marketing document and invited to participate in the process following execution of a legally binding nondisclosure agreement, according to the government-run operator.

Expressions of interest should be sent to [email protected] by the July 23 deadline.

Second time around

Announcement of TPHL’s reissuing of its request for proposals (RFP) for partners to purchase and restart assets of Guaracara and fellow subsidiary Paria Fuel Trading Co. Ltd. (Paria)s—which manages refined product import, storage, and distribution operations at the Pointe-a-Pierre site—follows official revocation in February 2021 of its September 2019 selection of Oildfied Workers’ Trade Union subsidiary Patriotic Energies and Technologies Co. Ltd. (Patriotic) as preferred bidder for the assets, according to a Feb. 26 release from Trinidad and Tobago’s Minister of Finance Colm Imbert.

After more than a yearlong process of negotiations, fiscal due-diligence, and asset inspection activities, TPHL on Feb. 18 determined it could no longer support Patriotic’s proposed $500-million acquisition of Guaracara and Paria after evaluating the would-be operator’s final financing proposal for the assets submitted on Feb. 5, according to Imbert.

In a separate release on Feb. 20, Imbert explained cancellation of the Patriotic negotiations boiled down to the company’s ultimate inability to ensure it could finance its purchase and operation of the refinery in accord with general criteria and conditions of the original 2019 RFP.

"Simply put, the fundamental conditionality in the financing proposal from Credit Suisse [Patriotic’s lender] was that the Government was required to issue to Credit Suisse, through Patriotic, $750 million in fully transferable and tradeable tax credits in exchange for the $500 million that would be paid to [TPHL] for [Guaracara] and Paria," Imbert said.

Essentially, this meant Trinidad and Tobago would have to give Credit Suisse $750 million in fully transferable money market instruments that the lender confirmed up front that it planned to sell on the open market, according to Imbert.

“Patriotic would then get [Guaracara] and Paria for free, having put up no money, collateral, or security, and could mortgage the [r]efinery and Paria as they saw fit…[which] was not what was envisaged or stated [originally]… and certainly not in the public interest.”

TPHL—which is responsible for managing the entirety of Trinidad and Tobago's oil-related assets—confirmed that the Pointe-a-Pierre refinery currently is in preservation mode, with Guaracara maintaining an active asset integrity program to enable a quick restart.

Anticipated to resume operations at the refinery in 2020 under the now-defunct Patriotic deal, TPHL has yet to disclose a definitive timeline for the newly announced RFP process.