LNG from the US cannot compete with supplies from Atlantic LNG (ALNG), says Nigel Darlow, ALNG’s chief executive officer. Speaking this week at the Trinidad and Tobago Energy Chamber’s annual energy conference in Port of Spain, Darlow noted that much was made of the US becoming an LNG exporter and its potential impact on ALNG, but said the US plants were simply noncompetitive.
“We can undercut the US and Australian plants significantly. We are order of magnitude more competitive so I don’t worry about [ALNG’s] ability to compete.”
Darlow added, “There is a lot of talk about US shale gas and the US becoming an LNG exporter, but I think it’s being overplayed in terms of its potential impact on [ALNG].” ALNG, he said, has “a distinct competitive advantage” over the US and Australia “because we have a much lower cost of capital development.”
He pointed to Cheniere Energy Inc. as an example in which it has posted that it needs to sell LNG at $2.50-3.50/MMbtu to be profitable while ALNG’s cost is just 65¢/MMbtu.
Darlow, however, is concerned about getting enough gas for the Point Fortin plant. He explained that in 2016, ALNG witnessed a 32% curtailment in its LNG supplies, which substantially hurt the company’s performance and its global reputation. On average, he said, ALNG exported 260 cargoes/year but in 2016 only exported 190 cargoes.
“Trinidad and Tobago has, over the years, enjoyed a really good global reputation of being a safe, reliable, efficient producer of LNG,” he said. “But for the first time we are being questioned about why we are sending out as much LNG and if we are becoming an unreliable supplier so from a global reputation point of view, it hasn’t helped. So we have some frustrated customers.”
Darlow said he was hoping that 2016 and the first quarter of 2017 will prove ALNG’s low point since close to 800 MMscfd of new gas will be coming on stream in 2017 from BP Trinidad & Tobago’s TROC and Juniper projects. He said ALNG’s performance should begin improving by yearend into 2018 but noted it would be a slow climb back.
Darlow added the he was encouraged about the possibility of both gas from Venezuela’s Dragon field and the massive 10-tcf Loran-Manatee cross-border field finally coming online.
ALNG is operator of a four-train liquefaction facility at Point Fortin on Trinidad and Tobago’s southwest coast, and is one of world’s largest LNG exporters. The facility is capable of producing as much as 100,000 cu m/day of LNG.