AIC, Guardian to Form JV for Inter-island Pipeline

Trinidadian financial companies AIC Trinidad and Guardian Holdings plan to form a joint venture with the Intra-Caribbean Gas Pipeline Company (ICGPC) to build a 400-mile pipeline from Trinidad to the eastern Caribbean islands, AIC Trinidad managing director Keith King told BNamericas.

"We all bring different things to the table," King said. The JV would be called the Eastern Caribbean Gas Pipeline Company (ECGPC). Guardian and AIC are putting US$600,000 into the project's feasibility study, which US engineering company Doris Inc, a subsidiary of Italy's Saipem Group, is carrying out, King said.

AIC and Guardian expect to receive the results of the study by August, at which time the partners will make a decision about whether to go ahead with the project, he said. The pipeline is designed to deliver about 100 million cubic feet of gas a day (mcf/d) from Trinidad to the eastern Caribbean islands, terminating in Guadeloupe, and could start up in 2007.

According to a previous report, Trinidad's national gas company NGC is facilitating the project and waiting for the government to decide what role, if any, it will play. King admitted the project, which would require investment of US$400mn-$500mn, is "quite ambitious," but the idea is that it would enable Trinidad to supply gas to the eastern Caribbean islands "in a long-term way" to generate cheaper electricity.

The project is attractive to AIC and Guardian because it would provide a stable long-term return cash flow with credible offtakers, mainly the French and local utilities in the eastern Caribbean, King said. King said the project is technically feasible, although it involves laying pipe in deep water, and cited similar projects elsewhere in the world, such as in the Black Sea.

Remaining challenges for the project include obtaining financing, securing offtaker contracts and establishing the gas price, King said. "It's still early days to decide where the capital would come from. I would suppose we would make some progress in the financial structuring by the end of the year, but one thing at a time, because we want to make sure we have a project first," he added. AIC Trinidad is a subsidiary of Canada's AIC Group, while Guardian Holdings is based in Trinidad.

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