Trinidad's liquid natural gas company denied government allegations Tuesday that it was incorrectly reporting its revenue to avoid paying more in taxes.
On Monday, Energy Minister Eric Williams said Atlantic LNG was diverting exports from Spain to the more lucrative U.S. markets, where natural gas prices are higher. But Williams said the company was failing to report the increase in revenue to Trinidad's government."Cargoes are being diverted to the U.S. market, but the revenue that is reported back to Trinidad is as if it had gone to Spain," Williams said.
But the company, which operates Trinidad's three liquefied natural gas plants insisted it has "always operated within the terms of contractual arrangements and Atlantic correctly reports on all of its revenues."
Atlantic LNG is owned by BP, British Gas, Spain's Repsol, Belgium's Tractebel and Trinidad's government-run National Gas Company, which has a 10 percent stake. It sells some 9.6 million tons a year.
The company's contract with the government requires it to export 40 percent of the gas extracted from the one plant to Spain and 60 percent to the United States. It must export 62 percent of the gas from the other two plants to Spain and 38 percent to the United States.
But Atlantic LNG said "the terms of the contracts were flexible enough to allow access" to more lucrative markets "with some of the value flowing back to Trinidad and Tobago."
Williams, however, said the government was seeking to re-negotiate the contract to "close that loophole."
In recent years, Trinidad has become the leading supplier of liquid natural gas to the United States, supplying 75 percent of imports last year. Liquid natural gas comprised only 3 percent of the total natural gas used in the United States in 2003, but that share is expected to grow to 15 percent by 2025.
Trinidad, which has proven natural gas reserves of 30 trillion cubic feet, reported economic growth of 12.8 percent in the fiscal year ending this month - much of it due to liquid natural gas. The nation of 1.3 million people relies on oil and gas for more than 25 percent of gross domestic product.
