VIDEO: PM Browne Says LNG Dispute With U.S Firm Resolved, First Ship Expected Within 30 Days

The government rejected a multimillion-dollar claim from contractors involved in Antigua and Barbuda’s liquefied natural gas (LNG) project and pushed back against proposed price increases before reaching a compromise that Prime Minister Gaston Browne said has cleared the way for LNG shipments to begin within the next month.

Speaking on Pointe FM on Saturday, Browne said the dispute stemmed from delays in dredging work needed to accommodate LNG vessels, which he said proved more difficult than originally anticipated because of unexpected rock formations.

“We were told initially that it was all sand. They had some extremely hard rocks,” Browne said, explaining that the government first used its own dredging company, Blue Ocean, before bringing in another contractor, Dutch Dredging, which also struggled to complete the work.

According to Browne, the delays prompted a U.S.-based joint venture involving Eagle to demand an additional US$60 million from the government, claiming losses caused by the postponed dredging.

“We had armed officials in the U.S. State Department calling us and trying to harangue us into probably settling,” Browne said. “As we said to them, we had no such legal undertaking to cover any such costs.”

He said the government rejected the claim outright.

“I went further. I said, ‘What you stated is not true. You didn’t lose US$60 million. They’re trying to fleece us.'”

The prime minister said further disagreements arose after the contractors sought to increase the price of supplying LNG because a smaller specialized vessel had to be used. While the government agreed to absorb several hundred thousand dollars in additional monthly shipping costs, Browne said it refused to accept what he described as an excessive increase in the energy charge.

He said Eagle proposed an increase of US$2.25, while the Antigua Public Utilities Authority advised that an increase of US$1.62 would be reasonable.

“We made it abundantly clear to them that under no circumstances were we going to pay that increase of US$2.25,” Browne said. “We said to them, ‘If you don’t like it, go to court.'”

Browne also said APUA’s existing supplier, APC, resisted efforts by the government to reduce the amount of electricity it purchased under its current arrangement in order to take advantage of cheaper LNG-generated power.

“I also said to them, ‘You have no choice. You’re only contracted to take 170. If you have a problem too, go to court,'” he said.

The dispute has since been resolved, Browne said, with all parties agreeing to the US$1.62 increase recommended by APUA instead of the larger amount initially requested.

“I’m told now that it’s settled,” Browne said. “The increase is US$1.62… which I think is a reasonable compromise in the circumstances.”

He said the agreement paves the way for the arrival of the country’s first LNG shipment within about 30 days.

“We should, I believe, within the next 30 days also be in a position to receive the LNG ships that will now bring LNG to our country,” Browne said.

The prime minister said the switch to LNG is expected to reduce electricity generation costs compared with diesel and heavy fuel while lowering Antigua and Barbuda’s carbon emissions as the country transitions toward greater use of renewable energy.

“We continue to fight unrelentingly for the people,” Browne said. “You don’t get what you deserve in life. You get what you fight for.”

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