(Trinidad Guardian) In what could turn out to be a major scandal for the government and state-owned National Gas Company, (NGC) Guardian Media has obtained confidential correspondence between Finance Minister Colm Imbert and the Board of the NGC that show the Board seeking, and Imbert agreeing, to grant them personal protection against being held to account should the company lose over $440 million in an ill-fated attempt to save Atlantic LNG Train 1.
Thanks to a whistle-blower Guardian Media has obtained letters between Imbert and the Board of the NGC, correspondence among Atlantic LNG shareholders, correspondence between Atlantic LNG’s President and NGC’s President Mark Loquan that all paint a picture of the Train 1 rescue effort being in deep trouble and hundreds of millions of taxpayers dollars at risk.
At the centre of the issue is the NGC and Keith Rowley administration trying to keep Atlantic LNG Train 1 operating in the face of bpTT and Royal Dutch Shell, both the largest shareholders of Atlantic Train 1 and the largest natural gas producers, saying they do not have natural gas to operate Train 1 and it should be shut down.
It must be remembered this was initially happening in December last year and followed several other plants closing under the government’s watch. The NGC said it wanted to keep Train 1 operational even though it has little natural gas of its own, pay for the turnaround (upgrade) and a monthly maintenance fee to keep the plant ready for eventual production if the natural gas could be located.
Highly placed NGC sources say it was a risky strategy led by the NGC’s CEO Mark Loquan and the projected loss to the company was US $64.7 million or TT $440 million.
In a letter dated February 25th 2021 and addressed to Finance Minister Colm Imbert, the Board of the NGC said it had invested, with Imbert’s agreement, US $24.7 million (TT $168M) in what it calls the ‘ALNG Train 1 rescue package’ and wanted permission to spend another US$40 million ($272M) to the end of the year.
The letter read, “Reference is made to our previous discussions on the ALNG Train 1 rescue Package and your previous non-objection to the NGC Funding Agreement with ALNG up to the period March 31, 2021 whereby the sum of US $24.7 million was advanced. I wish to confirm that the Board of Management of NGC met yesterday and approv-ed the further funding agreement with ALNG for the period April 1, 2021 to December 31, 2021 in the sum of US $40 million.”
The letter to Imbert added that the decision was made ‘after review of the various risks including the availability of gas and cash flow and also authorised NGC LNG to sign-off with members of ALNG on the Funding Agreement resolution today’.
As previously indicated both Shell and bpTT, the largest natural gas producers in the country and largest shareholders in Shell, had told the NGC and government since 2020 they did not have gas to keep Train 1 running and with a shortfall in natural gas in the country, including for the Point Lisas Industrial Estate, this was a major risk to the NGC’s plan to keep Train 1 going.
Aware of this and other risks the NGC in the same letter dated February 25th 2021 asked the Minister of Finance to indemnify it, its subsidiary company NGC LNG and the directors personally.
The Chairman of the Board Conrad Enill who signed to the letter and copied in the President of the NGC Mark Loquan wrote to Imbert and said, “We also previously discussed your commitment to indemnify the NGC company and Directors for any claims or losses stemming from the Train 1 rescue package ($168M). Our request is to extend that indemnity to cover ALNG funding for the April 1, 2021 to December 31, 2021. NGC is also required to indemnify its subsidiary NGC LNG which holds the 10 percent interest in Train 1.”
It must be remembered that both Enill and Loquan sit on both Boards and were seeking to be protected on both counts. In addition the late Malcolm Jones was taken to court by the UNC government who sought to hold him personally accountable for decisions he made as Chairman of the Board of Petrotrin and the matter was only discontinued when the PNM got back into power. An indemnity would protect the NGC Board from such a fate.
By letter dated February 8th 2021, two weeks before the February 25th letter referred to earlier, the NGC sent a copy to Imbert of the Indemnity document ‘with the required watermarks’ for the Board and company not to be held liable should the first US24.7 million be lost while the second letter was to indemnify for the US $40 million therefore ensuring they could not be made to pay from their pockets if the deal failed and the entire $440 million was lost.
The following questions were sent to NGCs President Mark Loquan.
Did you as part of the NGC Board seek an indemnification from the Minister of Finance and the Government for the Atlantic Rescue package? If so, why?
Was there a fear that the US $24.7 million and the subsequent US$40 million were at risk of being lost? If so did you as a director feel you had a fiduciary responsibility to not pursue the investment because of its risk to shareholders?
Were you written to on August 5th by Atlantic LNG indicating that the funding agreement and the gas sales agreement for Train 1 between Atlantic and LNG had been terminated?
Did you advise the Board that the NGC could go ahead with the investment in Train 1 because you were of the view the gas could be found?
In retrospect was that bad advice ?
Loquan did not directly respond but Lisa Burkette, the company’s Corporate Communication Manager wrote Guardian Media and said the following.
“Upon review of your questions, one must appreciate that they relate not only to the decisions made regarding Train 1. In fact, they speak to wider conversations on the status of the entire Atlantic facility with particular interest in the issue of unitisation, its future business model, etc.
The discussions surrounding these issues are ongoing among the stakeholders of Atlantic, which include NGC, other shareholders and the GORTT. Such discussions are at a critical and sensitive juncture and NGC must act responsibly and exercise prudence to avoid making any premature announcements on what are complex matters with far-reaching impact. NGC must also maintain fidelity to the agreed parameters of confidentiality on this issue, and as such we are precluded from disclosing any information at this time.”
While Burkett is insisting that discussions are ongoing and at a sensitive stage, statements similar to what Energy Minister Stuart Young and Prime Minister Dr Keith Rowley have in the past told the country, both internal NGC documents and a letter from the President of Atlantic LNG to Loquan paint a completely different picture.
The letter from Ronald Adams to Loquan dated August 3rd 2021 indicated that effective August 5th the same funding agreement which was approved at US $40 million has been terminate.
Adams wrote, “Pursuant to Clause 4 of the Agreement ALNG 1 therefore hereby notifies NGC LNG of the termination of the Agreement effective August 5, 2021.”
