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Safety Performance Will Help Competitiveness in LNG, says Darlow


Atlantic CEO Nigel Darlow said that the company’s safety performance and cost competitiveness will help it continue to be successful in the LNG business despite the current challenges facing the local natural gas industry.

“Safety is a key-platform that will help Atlantic continue to be successful, and maintain a world class business in Point Fortin,” said Darlow, who was speaking today (November 8) at the opening ceremony of the AMCHAM HSSE Conference, which was title-sponsored by Atlantic for the second consecutive year.

Darlow said that while Atlantic has consistently delivered a high level of performance in both personal safety and process safety, the current environment of low gas supply and low global commodity prices were presenting challenges to how the company manages safety.

“Atlantic is suffering very badly from big gas supply shortages on a scale we have never experienced before,” Darlow said. “Year to date 2016, Atlantic has suffered on average over 30% gas supply shortage and there is no significant improvement in the foreseeable future. In fact, 2017 is predicted to be worse still with overall gas shortage close to 35%. It is very serious for us, equating to something like 75 LNG cargoes lost each year. Atlantic is suffering the vast majority of gas supply shortage in the country.”

Describing how the low gas supply was impacting daily company operations, Darlow explained that Atlantic faced daily challenges in continually turning turbines and compressors “up and down and on and off”.

“That’s not how they were designed,” Darlow said. “We need to understand the impact that this is having on our operating envelope and our maintenance requirements and on our plant and on our equipment. We must ensure that the low levels of plant utilization do not present process safety risks which are not fully understood and properly managed.”

Darlow further explained that while the current market environment of low commodity prices was understandably causing companies to focus on cost reduction, this was potentially dangerous from the perspective of safety.

“No organisation will knowingly compromise safety in pursuit of cost reductions,” Darlow said. “But we must be careful about sub-consciously sending the wrong message and in doing so having unintended consequences. In looking for cost efficiencies and optimising how we work we must never cut safety corners.”

Darlow emphasized that Atlantic was one of the lowest cost producers of LNG globally, with a Freight on Board (FOB) cost about 50% less than the FOB cost for some of the new US LNG producers. “Atlantic can deliver LNG at significantly less cost than the much talked about new US and Australian plants,” Darlow said. “So yes, Atlantic and Trinidad will always be able to compete globally in LNG. That said, we have a responsibility to ensure we continue to spend money so that our operations are always as safe as they reasonably can be.”