Atlantic LNG Restructuring in Trinidad Expected to Reduce Shell’s Stake and Boost BP’s, Sources Say
Ownership in Trinidad and Tobago’s Atlantic LNG facility is set to change, with Shell’s stake diminishing. At the same time, BP and Trinidad’s state-owned National Gas Co are expected to increase their shares in a restructuring agreement to be signed this week, according to three individuals familiar with the situation.
The impending deal signals the conclusion of five years of negotiations. It clears the path for the largest liquefied natural gas (LNG) export facility in Latin America to return to full production. Since 2020, the facility’s first liquefaction train has been inactive due to decreased gas supplies from Trinidad’s offshore fields.
Trinidad and Tobago initiated the restructuring of Atlantic LNG after determining that the facility was not generating sufficient revenue. Prime Minister Keith Rowley stated that the new agreement would also maintain a pricing scheme revamped in 2020 to increase government revenue.
Last week, Energy Minister Stuart Young informed parliament that the country had benefited from the revised formula, resulting in an additional $2.5 billion in revenue since its implementation.
Atlantic LNG operates four trains with a total capacity of 15 million tonnes per annum (MTPA) of liquefied gas. However, due to the idling of train 1, only 8.2 MTPA was produced last year.
In the current structure, Shell and BP own 54% and 40% of trains 2, 3, and 4, respectively, while NGC has an 11.1% stake in train 4 but no ownership in trains 2 and 3. The new agreement simplifies the ownership structure across all four trains, reducing Shell’s stake to 45%, increasing BP’s stake to 45%, and giving NGC a 10% share.
Chinese Investment Co, which previously owned approximately 10% of Train 1, will no longer have shares in Atlantic LNG.
Shell and BP rely significantly on Atlantic LNG for their LNG portfolios. Last year, Shell’s share accounted for 15% of its global production, while BP’s share represented 18% of its global output.
Shell declined to comment, and BP stated that it would provide a statement upon signing agreements.
The adjusted shareholding structure aligns with each party’s gas contribution to Atlantic LNG. BP has been the leading gas producer on the island, averaging 1.2 billion cubic feet per day last year.
Shell is anticipated to increase production in the coming years, with an additional 700 million cubic feet per day expected from its Manatee offshore discovery by 2028 and a potential 250 million cubic feet per day in 2026 from Venezuela, subject to a proposed agreement for the offshore Dragon gas field.
NGC is reportedly in talks with Woodside Energy Group to bring gas from its 3.5 trillion cubic feet deepwater discovery.
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If gas from Dragon, Manatee, and Calypso can be supplied, there is potential to restart train 1, possibly by the first quarter of 2027 after the restructuring, as sources had previously indicated. However, this timeline is contingent on the availability of gas from Dragon (expected in 2026), Manatee (expected in 2028), and no determined date for Calypso.
As part of the 2020 restructuring, the parties agreed to calculate Trinidad and Tobago’s LNG prices based on a mix of global benchmarks, including Brent crude futures, the Dutch Title Transfer Facility (TTF) in Europe, the Japan-Korea Marker (JKM) in Asia, and the Henry Hub in the U.S. Before 2020, pricing had been solely based on the Henry Hub price, according to Prime Minister Keith Rowley.
