(Trinidad Guardian, 10.Feb.2022) —In a shake-up of the board of directors of the National Gas Company Ltd (NGC), the Cabinet last week decided not to renew the contract of Sean Balkissoon one of only two directors who voted against the ill-fated NGC attempt to save Atlantic LNG Train 1 and Kenneth Allum who raised issue with it but eventually voted for the deal.
Allum, sources say, is also someone who often challenged NGC president Mark Loquan at board meetings and it appears this has not gone down well with the government.
Multiple Cabinet sources confirmed to the Business Guardian that corporation sole, Finance Minister Colm Imbert, had initially proposed that the entire board be renewed but objection was raised by Energy Minister Stuart Young and following discussions by a Cabinet sub-committee, Young’s views held sway and out came Balkissoon and Allum. They have been replaced by Dr Joseph Ismael Khan who holds a DBA in management and Dr Donnie Boodlal, an associate professor in process engineering at the University of T&T.
Conrad Enill, who has been embroiled in controversy in the midst of a lawsuit from businesswoman Jenny Sharma in which she makes serious allegations, has retained his position as chairman of the board of directors.
According to the NGC’s website Balkissoon was appointed director on the NGC Board on January 28, 2019. He worked for over 25 years, with focus on the downstream methanol and ammonia industry.
Both Balkissoon and Allum are highly qualified with extensive experience in the energy sector.
Balkissoon holds a BSc in Chemical Engineering (Hons) from The University of the West Indies (UWI) St Augustine, and an Executive MBA (Hons) from the Arthur Lok Jack Graduate School of Business.
He began his career as a process engineer at Trinidad Cement Ltd, then progressed through several senior positions at Hydro Agri Trinidad (now Yara), Industrial Plant Services Ltd and British Gas T&T.
Allum is a chemical engineer with 38 years experience in the petroleum and petrochemical industry at all levels. Among the various positions held throughout his career, he worked as a senior technologist from 1981 to 1987, and then as an assistant to the managing director from 1987 to 1990 at T&T Oil Company Ltd (Trintoc)).
Allum also worked at the then Petrotrin initially serving as the vice president of refining and marketing (2008-2009) and, thereafter, as president (2009-2012). He was appointed as a director on the board of NGC in September 2015.
The removal of both men comes less than six months after the Business Guardian (BG) broke the story that the NGC had thrown away a quarter billion dollars behind the failed deal and was relying on gas contracted to the downstream petrochemical sector in its effort to restart Train 1.
The BG also revealed that in making the investment the directors tried to protect themselves from future litigation by asking for an indemnity for their actions.
Thanks to a whistle-blower the BG had obtained letters between Imbert and the Board of the NGC, correspondence among Atlantic LNG shareholders, correspondence between Atlantic LNG’s President and NGC’s President Mark Loquan that all paint a picture of the Train 1 rescue effort being dead.
The NGC and Keith Rowley administration tried to keep Atlantic LNG Train 1 operating in the face of BPTT and Royal Dutch Shell, both the largest shareholders of Atlantic Train 1 and the largest natural gas producers, saying they did not have natural gas to operate Train 1 and it should be shut down.
Highly placed NGC sources say it was a risky strategy led by Loquan and the projected loss to the company was US $64.7 million or $440 million.
In a radio interview Enill said, “If you look at what the conditions were at that point in time, the NGC found itself in a situation where most of these downstream companies were not taking the gas allocated to them. So we had a situation where we had gas, we had to pay for gas and the downstreamers were basically saying listen, on the basis of the cost that is available to us, we prefer to shut our plants down, at least for some time. And in those circumstances, we had a situation where the NGC faced a significant amount of losses.”
Enill went on further to explain what the situation was like in December 2020, “We looked at the situation where we had gas, domestic gas, and yes Curtis is correct, BP wrote us and said to us, listen we have some shortages, we think it is going to be about a month or so, we understood that was normal and we could deal with that. So we were working on the basis that we had gas, and we had no takers. We had planned a Train 1 maintenance of which the NGC would pay some portion because we are part owners in Train 1.”
He added, “Atlantic came to us and said, we need you to make a decision because by January 12, 2021 if you do not commit to the maintenance on this plant, the next opportunity that you have is in November of 2021, because immediately, as soon as your plant is maintained, we have to do shutdowns on two and then three in the normal course of things.
“We found ourselves in a situation, therefore, where, NGC took the decision that we are going to support and maintenance of the plant although the others (BPTT, Shell, the Chinese investors) decided that they were not going to so do, because we understood that we had gas that was available for domestic which we were negotiating, which if it had been converted to LNG to at least give us some revenue. That was in December.”
In a letter dated February 25 2021 and addressed to Imbert, the board of the NGC said it had invested, with Imbert’s agreement, US $24.7 million ($168M) in what it calls the ‘ALNG Train 1 rescue package’ and wanted permission to spend another US$40 million ($272M) to the end of the year.
The letter read, “Reference is made to our previous discussions on the ALNG Train 1 rescue Package and your previous non-objection to the NGC Funding Agreement with ALNG up to the period March 31, 2021 whereby the sum of US $24.7 million was advanced. I wish to confirm that the board of management of NGC met yesterday and approved the further funding agreement with ALNG for the period April 1, 2021 to December 31, 2021 in the sum of US $40 million.”
The letter to Imbert added that the decision was made “after review of the various risks including the availability of gas and cash flow and also authorised NGC LNG to sign-off with members of ALNG on the Funding Agreement resolution today.”
Aware of this and other risks the NGC in the same letter dated February 25, 2021 asked the Minister of Finance to indemnify it, its subsidiary company NGC LNG and the directors personally.
The chairman of the board who signed to the letter and copied in the president of the NGC wrote to Imbert and said, “We also previously discussed your commitment to indemnify the NGC company and directors for any claims or losses stemming from the Train 1 rescue package ($168M). Our request is to extend that indemnity to cover ALNG funding for the April 1, 2021 to December 31, 2021. NGC is also required to indemnify its subsidiary NGC LNG which holds the 10 per cent interest in Train 1.”
It must be remembered that both Enill and Loquan sat on both boards and were seeking to be protected on both counts. In addition the late Malcolm Jones was taken to court by the UNC government who sought to hold him personally accountable for decisions he made as chairman of the board of Petrotrin and the matter was only discontinued when the PNM got back into power. An indemnity would protect the NGC board from such a fate.
By letter dated February 8, 2021, two weeks before the February 25, 2021 letter referred to earlier, the NGC sent a copy to Imbert of the indemnity document “with the required watermarks” for the board and company not to be held liable should the first US24.7 million be lost while the second letter was to indemnify for the US $40 million therefore ensuring they could not be made to pay from their pockets if the deal failed and the entire $440 million was lost.
The prime minister has since come closest to admitting that Train 1 is dead and the money lost by saying it was on life support.
____________________
By Curtis Williams
