VZCZCXRO6864
PP RUEHDE RUEHGR
DE RUEHSP #0233/01 0741949
ZNR UUUUU ZZH
P 151949Z MAR 07
FM AMEMBASSY PORT OF SPAIN
TO RUEHC/SECSTATE WASHDC PRIORITY 7967
INFO RUEHHH/OPEC COLLECTIVE
RUCNCOM/EC CARICOM COLLECTIVE
RHMCSUU/DEPT OF ENERGY WASHINGTON DC

UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000233 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EPET ETRD ECIN PREL CARICOM JM TD
SUBJECT: T&T MEDIA FIRES BACK ON JAMAICA LNG 
 
REF: (A) PORT OF SPAIN 168, (B) KINGSTON 342 
 
SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY 
 
¶1. (SBU) SUMMARY:  The media dogfight between Jamaica and Trinidad & 
Tobago over liquefied natural gas has escalated in response to 
Jamaican private sector calls for retaliation against trade with 
T&T.  Tensions between the two CARICOM members have implications for 
momentum on regional integration, Venezuela's role in the region, 
and Alcoa's investments in Jamaica and T&T.  While the T&T 
Manufacturers Association has attempted to smooth ruffled Jamaican 
feathers, T&T media is pushing back and also voicing doubt that 
Venezuela will be able to supply LNG to Jamaica.  GOTT Energy 
Minister Saith publicly speculated that Venezuelan gas might be 
liquefied in Trinidad for sale to Jamaica.  END SUMMARY. 
 
¶2. (U) An exchange between the heads of the T&T Manufacturers 
Association (TTMA) and the Jamaica Manufacturers Associations (JMA) 
has set off a new round in the media dogfight over prospects for T&T 
to supply liquefied natural gas (LNG) to Jamaica. 
 
¶3. (U) In a conversation with Econ Chief and later in a press 
interview published by the Trinidad Guardian March 14, TTMA 
President Paul Quesnel said that JMA President Doreen Frankson had 
threatened to lobby the GOJ to take action against imports from T&T 
if the GOTT does not come through on its MOU to supply LNG to 
Jamaica starting in 2009.  Frankson had further complained that 
non-tariff barriers were blocking Jamaican businesses from entering 
the T&T market.  Quesnel responded that T&T manufacturers too have 
difficulty with bureaucratic red tape and a shortage of industrial 
park space in T&T.  Quesnel offered TTMA assistance to any Jamaican 
or other CARICOM business seeking to set up a business in Trinidad, 
and he invited Jamaica to participate in the TTMA's upcoming Trade 
and Investment Convention. 
 
¶4. (U) Editorial commentary in the March 15 Guardian took aim at the 
"anti-integrationist rhetoric from Jamaica's private sector," 
arguing that such rhetoric was "absolutely not justified."  The 
Guardian pointed out that the T&T-Jamaica MOU was "an expression of 
intent" and not "a promise to supply" LNG.  In an extended analysis 
in the same issue, Business Guardian editor Anthony Wilson 
discounted past GOJ assertions that CARICOM national treatment 
should have a bearing on the price at which T&T would sell LNG to 
Jamaica.  Wilson proposed instead a focus on reciprocity, since 
Jamaica needs LNG to expand alumina production and T&T needs alumina 
to smelt aluminum for prospective downstream manufacturing. 
 
¶5. (U) Turning to the LNG MOU reportedly signed March 12 by Jamaican 
Prime Minister Portia Simpson Miller and Venezuelan President Hugo 
Chavez, the Guardian labeled it a "fairy tale MOU" and noted that 
"President Chavez signed the MOU without having in place any 
identifiable LNG facilities whatsoever."  In T&T's case "it took 
Atlantic LNG four years from the signing of the sales contracts (not 
the MOU) to the delivery of the first LNG shipment - and that was 
considered to be warp speed in the LNG industry at the time."  By 
contrast, "Venezuela has been trying since the early 1970s (more 
than 30 years) to get an LNG facility off the ground and...the 
closest the South American country has come is the framework 
agreement signed by Shell and Mitsubishi five years ago. Little has 
been heard of that project, involving two blue chip multinationals, 
since 2002.  However," the Guardian editorial concluded, "if 
Jamaica's private sector believes that President Chavez' fairy-tale 
MOU will come through for it, it may stop trying to provoke Mrs. 
Simpson-Miller into declaring a trade war against T&T." 
 
¶6. (U) GOTT ministers have not responded publicly to calls from the 
Jamaican private sector for trade retaliation.  However, GOTT Energy 
Minister Lenny Saith told reporters on March 13 that it was in fact 
Prime Minister Manning who suggested to PM Simpson Miller that she 
seek an LNG arrangement with Venezuela.  Saith also suggested that 
because Venezuela does not have any facility to produce LNG, the 
Venezuelan LNG going to Jamaica "might" come from the fifth LNG 
train that the GOTT is currently contemplating, according to a story 
in the T&T Newsday.  At the same time Saith emphasized that he was 
being very cautious not to make any unilateral statements as to how 
10 trillion cubic feet of natural gas reserves lying across the 
T&T-Venezuela border would be commercialized, a question left open 
by the framework unitization agreement recently initialed by the two 
countries (reftel A). 
 
¶6. (SBU) COMMENT:  As our colleagues in Kingston have pointed out 
(reftel B), T&T-Jamaica tensions over LNG have significant 
implications for Venezuela's role as energy supplier to the region 
and for the momentum of economic integration under the CARICOM 
Single Market and Economy.  There are also significant implications 
for Alcoa's investment in the region, as the company seeks cheap and 
reliable energy for both an expansion of alumina production in 
Jamaica and a new aluminum smelter in Trinidad.  Alcoa can expect 
increased scrutiny and debate over its role in this issue and 
whether its investment is worth the opportunity cost to taxpayers in 
 
PORT OF SP 00000233  002 OF 002 
 
 
the region. 
 
¶7. (SBU) COMMENT CONTINUED:  We see the outlines of a deal among the 
governments in the LNG-for-alumina swap proposed by Anthony Wilson 
of the Guardian and in Lenny Saith's suggestion that Venezuelan gas 
might feed a new LNG train in Trinidad -- providing Venezuela 
agrees.  However that will not get LNG to Jamaica by 2009.  A 
well-placed LNG industry contact tells us that if Venezuela had all 
of the contracts and financing in hand today, it would be lucky to 
deliver LNG on its own by 2012, and he was hard-pressed to think of 
a company with the necessary expertise that would be willing to 
invest in Venezuela in the current climate.  Even T&T, with 
extensive experience in the business, would need three or four years 
to develop gas fields and bring on line a new LNG train that could 
supply new customers like Jamaica.  END COMMENT. 
 
AUSTIN