By Kimberly Ramkhalawan
As Trinidad and Tobago gets set to hear its seventh consecutive National Budget from the People’s National Movement led Government on October 4th, where it is expected to hear the application of the long-dreaded property tax, comes news that taxpayers will bear the brunt of another fallout arising from state owned National Gas Company of Trinidad and Tobago, NGC.
While questions continue to swirl over who will take responsibility for this major loss of revenue earnings from its natural gas, TT Prime Minister Dr.Keith Rowley has come in defense of NGC’s President Mark Loquan and expressed confidence in his sitting at the helm despite the TT$400M loss.
Red flags were risen when an article published in recent weeks by the Trinidad Guardian pointed to requests made by the Board of the NGC for personal indemnity in the event of loss arising from its attempts to save Atlantic LNG’s Train 1. The news article alleged that correspondence between its members and Finance Minister Colm Imbert show granting of this personal protection.
Going back to December 2020, when oil giant bpTT and Royal Dutch Shell, both major stakeholders of Train 1 called for its shutdown due to its inability to guarantee supply of natural gas for its operation, while other companies dependent on its supply announced shutdown of their plants as well, the NGC took the risky decision along with government to inject the total of TT$440M by year’s end as part of the ‘ALNG Train 1 rescue package’ plan, despite the continued operations of Trains 2, 3 and 4, with bpTT and Shell holding the majority of shares and NGC having a mere 11percent of Train Four and 10 percent at Train 1. Their decision, deeming Train 1 critical to the survival of the TT Economy despite it being the oldest and least efficient of all Trains in operation. However, this investment also meant that Train 1’s continued operations were based on gas finds capable of sustaining it, contrasting bpTT’s notice that it could not meet its daily contracted supply.
Trinidad and Tobago last highest gas production of 4.1billion cubic feet per day dates back to 2011, with its latest figures show gas production to be averaging at about 2.5 billion cubic feet per day. The decision made by the board to invest this amount in Train 1, which was also announced in December 2020 by the late Franklin Khan, former Energy Minister was based on cabinet negotiations, also aware of bpTT’s statement.
To add to this, another debacle would be revealed where a project started in 2017 by the NGC for the construction and commissioning of a compressor facility aimed at increasing its supply of natural gas to the Point Lisas Industrial Estate from its Beachfield facility located in Guayaguyare was halted when it was deemed unnecessary. At this point of the construction stage, over TT$195M was already spent, with TT$100M worth of compressors already purchased, left in the state-owned company’s possession and unable to resell. While the project was said to be in talks in 2012, action taken for its commencement would only occur in 2017, with several tenders issued to local service companies in the running for its bidding to supply the compressors.
But one former Minister in the Ministry of Finance, Mariano Browne is questioning these decisions taken and what it really means to the taxpaying citizen, and whether it is really ‘an amnesty or indemnity to the NGC board’. He adds that the NGC board is one incorporated under the Companies Act and allows for this to happen, only if it seen that the officers acted ‘in good faith in the best interests of the company’. Interestingly, Browne notes that other shareholders and the Atlantic LNG can sue the NGC, while future directors under new governments can also sue former directors.
He echoes the call for public accountability when poor business decisions at state owned companies are made resulting in the ‘wastage of public funds’.
Reports suggest that the current President Mark Loquan has about two months remaining on his contract. As to whether his position at the helm will be renewed remains to be seen.
Earlier this year several energy companies announced closure of their plants due to gas sales agreement done up by the National Gas Company as production was also reliant on a consistent supply of gas from Trinidad.