Home' Trinidad and Tobago Guardian : January 26th 2017 Contents BG4 | COVER STORY
BUSINESS GUARDIAN guardian.co.tt JANUARY 26 • 2017
Liquified natural gas from the
United States cannot compete
with Atlantic LNG, according
to the company's CEO Nigel
Speaking during a panel
discussion at the Energy Chamber's annual
conference at the Hyatt Regency Hotel in Port-
of-Spain, Darlow said a lot had been made
of the US becoming an LNG exporter and its
potential impact on Atlantic but he said the
US plants were simply uncompetitive with the
four LNG trains at Point Fortin.
"We can undercut the US and Australian
plants significantly. We are orders of magni-
tude more competitive so I don't worry about
Atlantic's ability to compete. The American
and Australian plants are not competitive
Darlow added, "There is a lot of talk about
US shale gas and the US becoming an LNG
exporter but I think it's being overplayed in
terms of its potential impact on Atlantic LNG.
I say that because Atlantic has a distinct com-
petitive advantage over US LNG position and
Australian LNG because we have a much lower
cost of capital development."
He pointed to Cheniere Energy as an ex-
ample in which it has posted that it needs to
sell LNG at between US$2.50 and US$3.50
per mmbtu in order to make a profit; while
Atlantic's cost is a mere US$0.65 per mmbtu.
The Atlantic CEO told the conference that
the construction of a new LNG facility in the
US or Australia would cost between five and
seven times what Atlantic spent to build its
Trinidad facilities and, therefore, its cost of
capital is much lower and the company enjoys
an almost first-mover status.
Darlow said what additional LNG supply
has meant is more of the commodity on the
global market and, therefore, a reduction in
the average price which affects everyone.
What Darlow is worried about, however, is
getting enough gas for the Point Fortin plants.
He explained that in 2016 Atlantic witnessed
a 32 per cent curtailment in its LNG supplies,
"that significantly hurt the company's per-
formance and its global reputation. "
He said, on average, the company exported
annually 260 cargoes but, last year, it exported
"T&T has, over the years, enjoyed a really
good global reputation of being a safe, relia-
ble efficient producer of LNG. You have other
countries with supply disruptions, Trinidad
has never had that.
"But, for the first time, we are being ques-
tioned about why we are sending out as much
LNG and if we are becoming an unreliable
supplier so from a global reputation point of
view it hasn't helped.
"We have some frustrated customers."
The Atlantic CEO said he was hoping that
2016 and the first quarter of 2017 will prove At-
lantic's low point since close to 800 mmscf/d
of new gas will be coming on stream in 2017
from bpTT's TROC and Juniper projects.
He said Atlantic's performance should begin
improving by the end of 2017 into 2018 but
noted it would be a slow climb back.
Darlow added he was encouraged about the
possibility of gas from Venezuela's Dragon
field and the massive 10 tcf Loran/Manatee
cross-border field finally coming into pro-
He also said that the potential massive gas
discovery by BHP in the deepwater could be
a potential game changer and, if so, Atlantic
has the potential to take additional gas and
also could construct a fifth train.
BHP optimistic about LeClerc gas
BHP Billiton has announced that its Le-
Clerc discovery in the deepwater off Trin-
idad's south east coast is a "large potential
gas resource" which contains both natural
gas and oil.
The company's asset president, conven-
tional, Geraldine Slattery, told the Energy
Chamber's annual conference that the dis-
covery was the first in the deepwater off the
"We are very encouraged by the large poten-
tial gas resource found in the LeClerc in block
five with gas penetrating multiple horizons.
This marks the first discovery in the deepwater
Caribbean and the potential opening up of a
new gas play."
Slattery added that while, historically, it
takes more than one well to determine the
potential of a new play, the company was con-
fident that it has a tier 1 opportunity in T&T.
"We are currently evaluating recoverable
gas volume as well as conditions both above
and below ground necessary to support the
further appraisal of that potential.
"We were also very pleased to have oil shows
in the deep of that well, a strong indication of
a liquid hydrocarbon system which supports
prospectivity for oil in the southern play."
Slattery added that if the appraisal went as
well it had, the potential to hit the market will
be in the near term---early to mid-2020s---a
time when there is expected to be a gas short-
fall in both LNG and in T&T gas supply.
On May 28, 2016, the Australian outfit began
to drill LeClerc with a target depth of 20,000
ft in which BHP was looking for three different
sands: two gas-bearing and one with black
oil. It was expected that the black oil would
be below the gas and the condensate would
have been seen at about 17,000 ft.
However, the Business Guardian has been
informed that at about 15,000 ft, the first
gas sand was found and the second, at about
16,000 ft. No oil sands were discovered, and
when the drilling reached 18,000 ft, a request
was made of the Ministry of Energy and En-
ergy Resources to drill beyond the original
Slattery said BHP conducted a global en-
dowment study in which it identified the
deepwater off T&T, and its neighbour Bar-
bados, as having world-class potential with
world-class source rock.
In an effort to pursue its aspirations for tier 1
discoveries, the company bid, won and farmed
into a total of nine blocks in Trinidad and two
in Barbados. They then collected 21,000 kilo-
metres of high fidelity seismic.
Slattery explained that over the next 20
years BHP Billiton is expecting continued
growth in energy demand and said the com-
pany did not see an oil price of US$55 to US$60
as being sufficient to bring on major new sup-
plies of crude oil.
She also predicted that natural gas prices at
the Henry Hub will continue to rise to ensure
that it met the economic cost of gas produc-
tion in the United States.
Atlantic president, Nigel Darlow,
left, makes a point during a
panel discussion at the Energy
Conference at the Hyatt
Regency hotel, Port-of-Spain on
Monday. Also on the panel were:
bpTT president Norm Christie,
second from left; facilitator
Avinash Persad; NGC chairman
Gerry Brooks, and Energy
Taskforce chairman Wendell
PHOTO: SHIRLEY BAHADUR
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