UK’s Centrica on Wednesday informed it has agreed to sell its entire portfolio of gas assets in Trinidad and Tobago to Shell Exploration and Production for an initial cash consideration of US$30 million (£24 million).
The assets consist of a 17.3 per cent interest in the producing North Coast Marine Area (NCMA-1) block and 80 per cent and 90 per cent operated interests respectively in the undeveloped blocks NCMA-4 and Block 22, Centrica said.
In addition to the initial consideration, Centrica will receive further payments subject to Block 22 and NCMA-4 reaching agreed project milestones.
The divestment is in line with Centrica’s strategy to focus its E&P activity in the UK, Netherlands and Norway and to exit its positions in Canada and Trinidad and Tobago.
The UK company acquired a 17.3 percent stake in the NCMA-1 gas production area and Blocks 22, 1a and 1b in 2010 from Suncor Energy.
The block supplies gas to the Atlantic LNG facility owned by BP, Shell and China’s sovereign wealth fund CIC unit Summer Soca and Trinidad’s state-owned company NGC.
The volumes produced from the NCMA-1 have been contracted to a third party on a long-term basis until 2023, Centrica said at the time of acquisition. The company then sold its 80 percent stake in Blocks 1a and 1b in April this year to De Novo Energy.
Production at the 14.8 mtpa LNG export facility in Point Fortin has been declining for almost two years due to the shortages in Trinidad caused by a lack in upstream investment and upgrades to gas infrastructure.
Earlier this month, Atlantic’s CEO Nigel Darlow said that year to date 2016, Atlantic has suffered on average over 30 percent gas supply shortage with no significant improvement in the foreseeable future. He said that the predictions for 2017 are even worse with overall gas shortage close to 35 percent. It equates to about 75 LNG cargoes lost each year, Darlow said.
Centrica added in its statement that the transaction now awaits government and partner approval and is expected to close in the first half of 2017.
LNG World News Staff