After spending $2.7 billion on a failed gas to liquids plant at its Pointe-a-Pierre refinery, State oil company Petrotrin is now stuck with a 95 per cent stake in a project it doesn't really have a need for.
Speaking to reporters yesterday after a business opportunity seminar at the Trinidad and Tobago Chamber of Commerce, Westmoorings, Petrotrin president Khalid Hassanali said the end result of the investment, brokered four years ago, was that it has not performed.
“It failed. We have a US$400 million situation of which we are not sure. We are trying to sell it,” he said.
Hassanali said the plant was a “used plant” predicated on processing subsidised gas, with Petrotrin taking all the product. That need will disappear once the company’s ultra-low sulphur diesel plant is finished next year.
“Now subsidised gas is (a National Gas Company) matter and we don’t do that anymore. The thing is, we don’t really need that product,” he said.
On Monday night, Prime Minister Kamla Persad-Bissessar announced Petrotrin had scored a “major victory” in the International Court of Arbitration of the International Chamber of Commerce, whose ruling gave the company majority control of the $2.7 billion GTL plant at Petrotrin’s Pointe-a-Pierre refinery.
Petrotrin chairman Lindsay Gillette gave a summary of the deal, the failure of which saw Petrotrin writing off over $1 billion in debt about a year and a half ago, producing a $159 million loss for the company.
“There was a contract negotiated where New York-based WGTL would have 51 per cent interest and Petrotrin 49 per cent. The money to fund the project was going to all come from Petrotrin, and in the event that could not happen, we would go back to the shareholders,” he said. That happened at the US$125 million mark and Petrotrin was the entity putting in all the money.
“That had to stop; hence the project went into receivership. World GTL sued us and we in turn went to the Court to arbitrate according to the contracts. The Court said since Petrotrin keeps putting out money they should get the equivalent in shares. That was the judgement.
Does that help us in receivership? Maybe, because if they decided to sue us it would only be for five per cent stake,” he added.
PriceWaterhouseCoopers is the GTL plant’s receiver. Gillette said he hoped a sale could be negotiated and the plant could be up and running, but not by Petrotrin. He said it is estimated another US$125 million will be required to get it going.