Energy Minister Announces Heads of Agreement for the Restructuring of Atlantic LNG

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 the execution by the Government, and Atlantic LNG Shareholders, companies affiliated with BP, Shell Trinidad and Tobago Limited (Shell) and The National Gas Company of Trinidad and Tobago Limited (NGC) of a Heads of Agreement for the restructuring of Atlantic LNG.

This milestone agreement comes after months of discussions and complex negotiations as the parties work towards a restructuring of Atlantic LNG.

These Member Shareholders have also entered into a separate Heads of Agreement in which they have committed to pursue, in good faith, discussions on the restructuring of Atlantic LNG. China Investment Corporation (CIC) which has an equity interest in Atlantic LNG Train 1 is not actively participating in the restructuring of Atlantic LNG but has been having discussions with shareholders and the Government.

In 2018, Government initiated discussions with the country’s major gas producers BP Trinidad and Tobago LLC and Shell Trinidad and Tobago Limited on gas related issues. An outcome of the negotiations with BP and Shell was an agreement by the parties to explore the restructuring of Atlantic LNG. The Atlantic LNG facility comprises four (4) LNG Trains, each with different shareholder structures and commercial arrangements. It was agreed that that the Atlantic LNG facilities would be managed more efficiently if brought under the framework of a single ownership structure. To attempt to restructure the shareholding and other commercial arrangements is unprecedented and involves many sensitive details at a time when the global energy landscape can be volatile.

In March 2019 the shareholders of Atlantic LNG signed a letter of intent affirming their willingness to discuss with Government the restructuring of Atlantic LNG. In February 2020 the shareholders submitted a proposal to Government to commence negotiations on a Heads of Agreement which was to be followed by definitive agreements. Following intensive negotiations agreement has been reached on a Heads of Agreement.

BP, Shell and NGC have committed to continue good faith discussions on the basis of agreed principles and to use reasonable efforts to negotiate and execute Definitive Restructuring Agreements for the ALNG Restructuring Project. The proposed date for completion and execution of the Definitive Restructuring Agreements is June 30, 2022.

Atlantic LNG is a world class facility and one of largest exporters of LNG in the world. It is a major contributor to the economy and a catalyst in the development of the country’s natural gas resources. The restructuring will ensure that Atlantic continues to operate as a world class LNG facility in a globally competitive LNG environment.

Government’s negotiating team was led by the Honourable Stuart R. Young, M.P., Minister of Energy and Energy Industries and Minister in the Office of the Prime Minister and included Permanent Secretaries of the Ministry of Energy and Energy Industries, Mrs. Penelope Bradshaw-Niles and Mrs. Sandra Fraser, members of staff of the Ministry and support from US Attorneys White and Case LLP and technical advisers UK  Consultants  Poten and Partners  and Gas Strategies.