Gas-to-liquids company, NiQuan Energy Trinidad, has discontinued its legal proceedings against the State.
The company filed notice to discontinue matters against the State last month but no reasons were given.
NiQuan went offline in September 2023 as a result of legal, financial and technical issues.
In an update to employees though an email, NiQuan founder and chief visionary officer Ainsley Gill explained that the company has been engaged in mediation with Trinidad and Tobago Upstream Downstream Energy Operations Company Limited (TTUDEOCL) with Lord Neuberger of Abottsbury, (former president of the Supreme Court in England) as the mediator.
According to a GML report, Gill said the mediator delivered an early non-binding “Early Neutral Evaluation” on January 20 which said the gas supply contract had not been terminated and TTUDEOCL had an obligation to supply gas in accordance with that contract.
He noted that in absence of a gas supply contract and to protect NiQuan’s interests, the company will “be pursuing all its legal remedies for substantial damages from TTUDEOCL and the Government of the Republic of Trinidad and Tobago.”
“This course of action is supported by our lead financial arranger and noteholders and in the interim we have their support to continue the status quo including preservation of the plant in silent mode,” he said.
To this end, Gill said the employees would be furloughed for a further three months until April 30.
The company has been cash- strapped since it went offline and found itself in default of its US$150,000,000 million facility last December.
Since the company went off line, NiQuan has only paid two salaries to its 70 employees for August and September 2023.
While its financiers are raising money for the company, it has given instructions that it was not for salaries.
Hundreds of millions are owed to lenders including some of country’s top banks and credit unions.
Last October, in a press statement, regional rating agency CariCRIS lowered NiQuan’s credit rating to B- which impacted its ability to raise any short-term funding. CariCRIS warned that it could be further lowered if NiQuan does not successfully refinance it short term debt by the end of the year.
CariCRIS said the lowering of the assigned ratings reflect NiQuan’s inability to attain full commercial operations at the nameplate capacity by September 30, 2023 (identified as a factor that could lead to a lowering of the rating in their March 2023 report) and the termination of the gas sales contract by TTUDEOCL which has become subject to legal proceedings by NiQuan.
CariCRIS said it will consider revising its ratings upward if NiQuan can resume a long-term GSC, together with successful refinancing of the existing Short-Term Note Instruments (STNI) into a longer-term facility.
“We may, however, further lower the ratings if the STNI is not refinanced or extended by December 31, 2023, or if any other credit negative events occur before that date,” the rating agency warned.
On March 16, 2023, CariCRIS noted that if NiQuan was not able to achieve optimal production by June 30, 2023, it would affect its ability to refinance the existing notes or obtain approval for a further extension by noteholders by July 31, 2023.
It noted that the inability to achieve certification of full nameplate capacity of 2,400 barrels per day “adversely impacted the Company’s ability to secure timely refinancing.”
At that time, it noted that at December 2022, Niquan’s total debt stood at US$218.7 million, a 416.6 per cent increase from 2018 which was projected to further increase to US$312 million by December 2023.
The June 15, 2023, accident at the plant which led to the death of 35 year-old pipe fitter Allanlane Ramkissoon and the subsequent closure of the plant for investigations by the Occupational Safety and Health Agency and the Ministry of Energy and Energy Industries (MEEI) affected the company’s ability to re-finance its debt which was set for July 31.
On September 22, 2023 NiQuan’s chairman John Andrews, in a newspaper advertisement, asked the Government to uphold the “sanctity of contract” despite the fact that no contract exists between the company and the State.