Trini oil company served with US$2 billion lawsuit

In 2005 World GTL Inc and Petrotrin entered into a "Project Agreement" to build a gas-to-liquid plant within Petrotrin's refinery at a location selected by Petrotrin and recommended as safe. The partnership company – World GTL Trinidad Limi

NEW YORK, United States, Friday May 14, 2010 – The Petroleum Company of Trinidad and Tobago (Petrotrin) has been served!

World GTL Inc yesterday said it had served the state owned oil company with the US$2 billion lawsuit it filed after the collapse of a partnership between the two entities.

The New York-based company, which claimed that Petrotrin breached its contract and expropriated assets in joint venture company World GTL Trinidad Limited, said it had been able to deliver the legal documents with the help of a court in the twin-island republic.

In the complaint filed in the US Federal District Court, World GTL Inc claims that Petrotrin executed its secret plan to expropriate the plant with the full knowledge and consent of the Trinidad Government.

In 2005 World GTL Inc and Petrotrin entered into a "Project Agreement" to build a gas-to-liquid plant within Petrotrin's refinery at a location selected by Petrotrin and recommended as safe. The partnership company – World GTL Trinidad Limited – was owned 51 percent owned by the World GTL Inc subsidiary, World GTL of St Lucia Ltd, and 49 percent by Petrotrin.

"In order to obtain project financing, Petrotrin introduced us to Credit Suisse, noting that a former Trinidad finance minister was now an officer of the bank. The bank agreed to provide a US $125 million loan," said James Carlisle, World GTL Inc's vice president of finance and operations. 

"Contrary to Petrotrin's representations when we entered into a 'Project Agreement,' there were numerous toxic sulfur releases from the Petrotrin refinery, which contaminated the entire facility including the gas-to-liquid plant," said Carlisle. "We had to evacuate the plant on many occasions - sometimes for as long as two months at a time - creating unforeseen cost overruns and delays severely impacting our ability to meet the completion date set forth in the agreement with Credit Suisse.  Plant closings and evacuations continued despite the many assurances from our partner, Petrotrin, that the situation was being corrected," he said.

However, according to the complaint, Petrotrin secretly bought World GTL Trinidad's loan from Credit Swiss, which had been jointly guaranteed. 

"Moreover, with a clear disregard for their fiduciary responsibilities to the GTL joint venture company, Petrotrin engaged in actions demonstrating it planned to control the project," continued Carlisle.  "This included payment to Credit Suisse of a disputed $16.2 million breakage premium in order to facilitate taking ownership of the loan," said Carlisle. "This was done secretly so they could declare a default effectively expropriating the assets without compensating us," he said.

According to the complaint, World GTL Inc and its subsidiary, World GTL St. Lucia, allege that Petrotrin did not make the requisite corrections to the sulfur problem because it at all times wanted timely completion of the construction of the plant to fail, thereby creating a default under the terms of the loan agreement with Credit Suisse. 

That, the companies said, allowed Petrotrin to appoint a Receiver to take over all the assets of the entire project without proper compensation to World GTL Inc. This action was not only contrary to the agreements between the parties but constituted fraud on its face, according to the Complaint.

World GTL Inc is seeking compensation from Petrotrin for alleged fraud, negligent misrepresentation, breach of contract, unjust enrichment, negligence and expropriation.