NiQuan Energy has finally made progress on the gas-to-liquids facility (GTL). The project has been uncertain for quite some time now and there have been many hurdles along the way, but it appears now that NiQuan has the green light to proceed.
Following an extensive due diligence process lasting several years and requiring the fulfilment of a range of demanding conditions precedent, NiQuan Energy Trinidad Limited has consummated and concluded the sale and purchase agreement with World GTL Trinidad Limited (in receivership) and the agent receiver, Mr. Brian Hackett of PricewaterhouseCoopers, under which it has acquired the plant, property and equipment in return for a cash payment of US$10 million plus US$25 million in nonconvertible preference shares to the debenture holder, Petrotrin. This is according to a recent statement by the company.
The statement says that the conclusion of the purchase agreement now opens the way for the unfinished plant to be completed and made operational. Work on this began as soon as the purchase agreement was consummated and is expected to take between 18- 24 months.
In addition to the payment to Petrotrin, the plant will require the investment of over US$100 million to complete. This investment capital will be provided entirely by NiQuan Energy with no additional funding from Petrotrin or the Government of Trinidad and Tobago.
Minister of Energy and Energy Industries, Senator the Honourable Franklin Khan, speaking in Parliament, said the project will bring 700 jobs, a capital injection of US$125 million into the economy and $2 billion in taxes and other payments. He added, ‘This NiQuan project provides Petrotrin the opportunity to salvage some not insignificant benefit from an investment which otherwise couldn’t be operationalised. The economy and state stand to benefit from increased commercial activity and taxes’.
Ainsley Gill, CEO of NiQuan Energy, said that, ‘This is a major landmark in the development of NiQuan Energy and it represents investment, jobs and a cleaner energy future for the people of Trinidad and Tobago. NiQuan Energy will pay to complete the plant and turn it into a going concern, not the taxpayers of Trinidad and Tobago’.
He added that when completed, the plant will have an initial capacity of 2,000 barrels of GTL products per day (80:20 GTL diesel: GTL fuel) and this will be increased to 2,400 by subsequent development.
Gill said that gas for the project will be provided by the new state company, Trinidad and Tobago Upstream Downstream Energy Operations Company Limited, and the off-taker for the products will be Petrotrin.
The statement added that NiQuan GTL will have very high local content and much of the required project financing has been sourced locally through Republic Bank Limited. The local lead contractor is Junior Sammy and the risk advisor is Aon Energy Caribbean Limited. The engineering, procurement and construction (EPC) contractor is Black & Veatch Corporation of Kansas, USA.
This project will be critical to Petrotrin in the future since the company would not be able to supply bunker fuel for ships after January 2020 due to increasingly stringent maritime regulations regarding sulphur content in fuel. Petrotrin needs to complete this and the ultra-low sulphur diesel (USLD) plant before 2020 as failure to do so will certainly reduce the available markets where the company can sell fuel with high sulphur content