Trinidad to restart idled LNG unit by early 2027 amid restructuring

(Reuters) - Trinidad and Tobago aims to restart an idled liquefied natural gas unit by the first quarter of 2027 after agreeing to restructure the facility's ownership and negotiate new gas supplies, according to three people with knowledge of the plans.

Trinidad is Latin America's largest LNG exporter, but its joint venture company Atlantic LNG has not been able to access enough supply in recent years to keep its four liquefaction units running. Trinidad and Tobago has the capacity to process 4.2 billion cubic feet per day (bcfd) into LNG, petrochemicals and power, but its gas production is about 2.7 bcfd.

The government has pressed gas producers to increase offshore output to restart the dormant 500 million cubic feet per day (mmcfd) unit, known as train one, which was suspended at the end of 2020, due to a lack of gas supply.

The restart will follow a proposed revamp of Atlantic LNG's ownership and its gas-supply provisions, the sources said.

In December after four years of negotiations, the partners of Atlantic LNG agreed to restructure ownership of the LNG firm with a change in the structure from one in which Trinidad's National Gas Company, BP, Shell, and the Chinese Investment Corporation held different equity stakes in the different units, to a new combined shareholding.

In simplifying the project's structure, Shell and BP each will own a 45% stake each in the plant's four units with NGC holding the remaining 10% of each, the sources said.

As a pre-requisite a final investment decision on an offshore gas field, Shell told the Trinitarian government that Atlantic LNG had to be restructured and warned that any hiccup could delay gas availability to as late as 2028, according to a document seen by Reuters.

Shell and BP declined to comment on the ongoing ownership negotiations.

The changes would eliminate CIC's 10% stake in train one, the people said. CIC did not immediately reply to a request for comment.

Gathering pace

Trinidad's Energy Minister Stuart Young told Reuters earlier this month Atlantic LNG's restructuring was gathering pace and would be completed soon but declined to elaborate on details.

"We are in the process of finalizing the definitive agreements," Young said. "Hopefully, (it will be ready) at the end of third quarter, start the fourth quarter of this year."

The restructuring will allow Atlantic LNG to buy gas from producers who are not plant co-owners, clearing the way for Woodside Energy and EOG Resources to sell gas to Atlantic LNG when available, the people said.

Previously, only BP and Shell could provide gas to the plant.

The government separately is negotiating fiscal and commercial terms with Shell and Woodside, operators of two offshore gas development projects, called Manatee and Calypso, Young also said.

The first offshore development that could deliver new gas is expected to be Shell's Manatee field.

Trinidad, however, also hopes to import gas from Venezuela's Dragon gas field while receiving supplies from Woodside Energy's Calypso, under proposed $5-B investments in energy exploration and production in the country through 2026.

The U.S. Treasury Department issued a license in January to Trinidad, Shell and NGC to develop with Venezuela's heavily sanctioned state company PDVSA up to 4.5 trillion cubic feet (tcf) of gas in Dragon, near the maritime border between the two countries.

Shell's Manatee field has 2.7 tcf of gas on the Trinidad side, with neighboring Venezuela owning another 7.3 tcf in the cross-border field.

Shell in mid-May submitted a field development plan to Trinidad's energy ministry that calls for production of 700 mmcfd. Other volumes could become available if Venezuela agrees to process its portion of the field's gas in Trinidad, the people said.

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