In a changing environment, Atlantic LNG charts a new courseMay 11, 2023
Ronald Adams, CEO of Atlantic, talks to The Energy Year about the potential to expand Atlantic LNG’s markets and how the ongoing discussions on the plant’s ownership restructuring and NGC’s role as a shareholder across all Atlantic trains will help to increase operational efficiency. Atlantic LNG is a liquefaction facility in Point Fortin with a capacity of 15 million tonnes per year.
How do you reflect on Atlantic LNG’s journey in recent years and the potential to expand its markets?
In April 2022, we completed our 4,500th cargo, and as of January 2023, we are now over 4,600 cargoes. This is the result of more than 20 years of operating a very large industrial facility in Point Fortin with two jetties where we’ve been receiving world-scale vessels.
We have had the benefit of excellent relationships with our shareholders with whom we have offtake arrangements and have been delivering cargoes of LNG across the globe for a long time. In the company’s very early years of operation, most of our cargo went to the US. Now we export primarily to Europe, the Far East, South America, and Caribbean islands such as Jamaica, Puerto Rico, and the Dominican Republic. I’m certain that some of the smaller Caribbean islands are also looking at setting up the right kind of infrastructure to allow them to receive LNG.
I was able to work with the Atlantic leadership team and our shareholders to evolve and develop Atlantic’s new strategic plan and strategy. We are well into executing our strategy and implementing our mission-critical tactics to set up the organisation for the future. It’s a rapidly changing environment and everyone has been impacted by the implications of the energy transition, including us.
What development plans has Atlantic set out for 2023 to continue its contribution to Trinidad and Tobago’s economic growth?
We have approved a strategy that focuses on five pillars: safety, environment and sustainability, cost competitiveness, competence of our people and the availability of the plant. The last pillar speaks to maintaining and operating the plant so that we are able to receive and process available gas as best as possible. Those five strategic pillars have been underpinned by three core enablers: our focus on digitising our operations, our asset management system, and our company culture, which we call the “Atlantic Way.”
A key tenet has been to refresh and reframe our maintenance strategy because we’ve been in operation for over 20 years, which means that we are no longer among the newest LNG facilities around. Our technology is not as new as that found in some of the plants now being built and so to maintain our competitiveness, we have to continually look at ways to operate more efficiently.
In what way has the global energy transition impacted Atlantic’s plans and strategy?
We have implemented different strategies and operating philosophies to reduce our carbon footprint. We are ensuring that our new operators understand the change that has to be made given that we are operating an older facility, but in a new, more competitive environment. We continue to ensure that our cargoes meet the requirements to enter the European markets – markets where there is going to be carbon taxation very soon and so we are formulating our plans around this.
How do the restructuring of ownership and NGC’s role as a shareholder across all trains help to further increase operational efficiency of Atlantic LNG as well as LNG export revenue for the Trinidadian government?
The shareholders of Atlantic and the government have been negotiating the restructuring of the company. It is a simplification of the current, complex nature of the Atlantic structure. Currently, we have multiple shareholders with multiple gas offtake agreements, and very complex governance arrangements.
The restructuring of Atlantic seeks to unify that commercial arrangement under one framework of governance. With that simplification comes more opportunities for efficiency in our ability to receive the gas that is currently available. Without the constraints of multiple commercial offtake arrangements, we are now setting up the organisation to utilise the gas that is currently available more efficiently across our operating trains.
Another key tenet of the restructuring is to eventually allow for third-party gas producers to gain access to Atlantic’s LNG facility for the purpose of processing gas for external markets.
What are the benefits of allowing third-party producers to access your facilities?
It provides an opportunity for gas producers who are not current shareholders to continue investing in Trinidad and Tobago and to see the value in that. It’s a chance for them to continue producing gas in the country and gives them an opportunity, through the new restructured arrangement, to gain access to Atlantic’s facilities in order to process gas and generate export revenue. It also sets the organisation up to be in operation for the next 20 or 30 years.
What key steps is Atlantic taking to contribute to the reduction of the nation’s carbon footprint?
Trinidad and Tobago is a signatory to the Paris accord, and work continues apace to develop its nationally determined contributions. Atlantic and other operators across the value chain have been transparently sharing our emissions intensity information with the authorities. We are all working together to ensure that Trinidad and Tobago meets its commitments. A key part of that is working with shareholders like Shell, bpTT and NGC, and as part of our strategy, we give deep consideration of the portfolio plans of all our shareholders.
What effort is being taken to remain competitive while changing technologies to reduce emissions and enhance sustainability in your operations?
Over the last couple of years, we’ve identified two broad scopes that could allow us to reduce our carbon footprint. We’ve looked at the first 20% that impacts our current carbon footprint and have made some progress on that by improving operational controls and energy efficiency so we can reduce GHG emissions to as low as reasonably practicable and by decarbonising our operations within our span of control.
Then we started looking at the other 80%, but this involves significant capital investments such as projects that would lead to electrification of our facility, or perhaps projects that involve carbon sequestration and CCUS.
CCUS would need to be looked at on a national level. We are meeting with our shareholders and discussing those types of projects to determine what it will take and what the timeline would look like. These initiatives are going to take some time and continued collaboration with our shareholders, the government and agencies such as the EMA [Environmental Management Authority].
We have a programme called the Atlantic Real Time Energy Management Information System, or Artemis. We have set up algorithms on the plant that allow our operations personnel within the control rooms to be very deliberate about every operational adjustment that they make – which turbines they run, how many they run, for how long. The algorithms provide guidance to the personnel while we seek to minimise our carbon emissions through the use of advanced engineering.
How do you view the current global LNG market dynamics and Trinidad and Tobago’s position for becoming a reliable energy exporter to Europe?
The global energy environment has become very dynamic but very uncertain. The advantage that Trinidad and Tobago and Atlantic have is the many years of great experience in that space and understanding the vagaries of the international markets.
The new dynamics have resulted in the majority of our cargo for 2022 going to Europe. As much as 40% of our cargo has been exported to European territories, while 9% has gone to South America, 11% to the USA, 11% to the Far East and the rest to other locations. We have taken advantage of the opportunity to provide LNG where it is needed as a result of geopolitics and the Russia-Ukraine war. Our goal is to continue to penetrate those markets.
We have well-run facilities currently operating at 70% utilisation combined with the markets and the capacity for more natural gas. There’s a reason why there is so much investment taking place with respect to LNG: the efficiency of getting it to where the demand is. That refers to the infrastructure, the development and the ships.
Additionally, as Germany has proven, developing and building regasification terminals has become even more efficient than it was five to seven years ago. The entire value chain has been set up now to allow efficient movement of gas as LNG across the globe.
What does the removal of sanctions on the Dragon field signal for future collaboration between Trinidad and Tobago and Venezuela?
The Minister of Energy is spending a lot of time engaging with the key global players, and with the stakeholders in Venezuela. A great deal of work is taking place within our borders with respect to the potential of the Manatee field, and that perhaps has the potential to eventually make the Loran part of the field accessible. That gives encouragement to those working toward developing the deepwater acreage within our borders.
Atlantic’s legacy of LNG expertise coupled with its new strategic direction positions us to thrive in the global energy transition. This combined with all of these strategies and investments, which are linked to the restructuring of Atlantic sets up a future for Trinidad and Tobago’s energy industry to continue for many decades.