Banks to Loan 80% of US$260mn Pipeline Costs
|Thursday, July 01, 2004
A group of four banks will loan US$208mn to Trinidad & Tobago's National Gas Company (NGC) for the 56-inch diameter cross-country pipeline, NGC president Frank Look Kin told BNamericas.
The loan represents 80% of the US$260mn project costs, and the banks offered a loan over 15 years, Look Kin said, unable to disclose either the names of the banks or the interest rate until a formal announcement is made.
Details are still being finalized and the deal could be made public at the end of July, he said. Construction started in January this year but was delayed by a strike. Finishing by the August 2005 target date is still possible, Look Kin said, but in order to meet that date the company may have to open two work fronts instead of one, as well as hope for a break in the bad weather that has also slowed project progress.
The pipeline is one of the largest in the western hemisphere, and will take gas produced off Trinidad's east coast from its landfall at Beachfield in Guayaguayare bay to the fourth train at the Atlantic liquefied natural gas (LNG) complex at Point Fortin on the west coast.
NGC holds an 11.11% stake in Train 4 (T4), and in line with the T4 owners' agreement will supply 11.11% of the gas, meaning that the pipeline is both a transporter and a shipper.
Without compression, pipeline capacity is 2.4 billion cubic feet a day (bcf/d). NGC has set aside 600mcf/d capacity for the Union Estate industrial park project near Point Fortin.
When that capacity would actually be used is not known yet, but Look Kin estimated that some 200mcf/d gas would be used at Union Estate by 2007 or 2008. The first buyer of the Union Estate gas would probably be a petrochemical company, he added.
Parallel to the onshore pipeline, NGC is working on the Beachfield upstream project (BUP) offshore pipeline, which will be necessary for NGC to increase its present 1.4bcf/d gas transport capacity once the M5000 methanol project comes online in August 2005. The 16-inch diameter BUP will be ready at around the second quarter of 2005 and will increase gas capacity to 2bcf/d.
NGC calls itself "the keeper of the flame," and sets out to facilitate and direct the growth of the hydrocarbons - namely natural gas - industry on the island. It does not have any significant exploration and production stakes, and would buy from producers to meet its supply obligations to Atlantic LNG's T4.
Look Kin was speaking on the sidelines of the Latin American & Caribbean Gas Summit, organized by CWC Associates Limited.
About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports.
Click here for a Free two week trial to our Latin America Oil & Gas information service.