Trinidad & Tobago in talks on gas

news.ft.com By Canute James in Kingston Published: February 10 2003 4:00 | Last Updated: February 10 2003 4:00 Trinidad and Tobago is negotiating with several neighbouring countries the terms under which it will supply them with gas through a pipeline that it plans to construct.

The discussions are taking place with its immediate neighbours in the eastern Caribbean, and with the French islands of Martinique and Guadeloupe, said Patrick Manning, prime minister. "We could supply about 70 per cent of their demand for natural gas," he said.

Officials say the gas-rich state also plans to use tankers to offer gas to countries in the northern Caribbean, such as Jamaica, Puerto Rico, the Dominican Republic and eventually Cuba.

The country, located off the coast of Venezuela, has become one of the world's major producers of liquefied natural gas through investments of $3bn over the past four years by European and US companies.

The pipeline, the first phase of which is estimated to cost $500m, will provide a new market for the major players in the country's energy sector, including BP, British Gas and Repsol YPF of Spain.

While the gas pipeline will be mostly state-funded, financing agencies from several developed countries are willing to raise the additional funding, Mr Manning said. He estimated that the pipeline would be completed in about seven years.

The first phase of the venture will be a pipeline running northwards from Trinidad and Tobago, through Martinique and Guadeloupe, to Puerto Rico, with spurs supplying Barbados, Antigua, St Kitts and Dominica.

Feasibility studies indicate that the project will reduce energy costs to the region by as much as 30 per cent, said the prime minister.

A European consortium is finalising proposals to Trinidad's government for an almost five-fold expansion in the production of liquefied natural gas to 14.5m tonnes a year, with investments totalling about $2.5bn.