Reprinted from Caribbean Net News
caribbeannetnews.com

UK producer to supply gas to Trinidad & Tobago

Friday, January 5, 2007

by: Renee Lawrence

LONDON, England (Bloomberg): BG Group Plc, the UK's third-biggest oil and gas producer, has agreed to supply natural gas to Trinidad & Tobago for 15 years from 2009, as the supplier expands its operations outside Britain.

BG and its partner, Chevron Corp., will provide National Gas Co. of Trinidad & Tobago Ltd with 220 million cubic feet of gas a day, BG said in a statement Thursday. A final accord, to be completed this year, "underpins the commercialisation" of natural-gas reserves off the coast of Trinidad & Tobago, BG said.

The Reading, England-based company is expanding as British taxes rise and North Sea output dwindles. BG began operating in Trinidad & Tobago in 1989, supplying the domestic market and exporting from a liquefied natural gas facility to North America.

BG said in November third-quarter LNG sales rose after output began at the Dolphin Deep field off Trinidad & Tobago in July.

The sales agreement "could be part of their strategy of enhancing their exports of LNG from Trinidad & Tobago," Mark Hives, an analyst with Societe Generale in London, said by phone today. "Domestic consumption in Trinidad & Tobago is small and most of their gas is exported to the US and Spain."

LNG is natural gas chilled to liquid, reducing it to one-six-hundredth of its original volume, for shipping by tanker to sites not connected by pipeline. On arrival, it's turned back into gas for distribution to power plants, factories and households.

"Some players within the LNG industry, for example BG, are developing a portfolio of LNG sources," Hives wrote in a report published Wednesday. "To take advantage of this business model, it is necessary to have a portfolio of gas sources in both the Atlantic Basin and Asia Pacific markets, and ownership of, or rights to use, a number of regasification terminals in these markets, plus a fleet of LNG ships."

BG said Thursday it signed an agreement with Samsung Heavy Industries Co. Ltd. of South Korea for two LNG ships. The new ships will each be able to carry as much as 170,000 cubic meters of LNG. The ships are due to be delivered in 2010.

Print Page