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$2B Demand in Refinery Expropriation

MANHATTAN (CN) - The Petroleum Co. of Trinidad and Tobago lured a developer to build a gas-to-liquid plant and then "with the full knowledge and consent of Trinidad, executed its secret plan to take control of it" by expropriating it, the developer claims in Federal Court. The petroleum company is wholly owned by Trinidad and is operated by its Ministries of Finance and Energy.

World GTL and World GTL St. Lucia say the petroleum company, which goes by the name Petrotrin, took control of the nearly completed, $500 million plant at the Petrotrin oil refinery in Pointe-a-Pierre, Trinidad.

Petrotrin's scheme ruined World GTL's plan to use the Petrotrin facility as a showcase and platform to build such facilities throughout the world, according to the complaint.

"The renowned banking firm Calyon, based on various analyses, valued the World GTL enterprise in excess of $2 billion," the complain states. "With defendant's successful scheme to take over WGTL-Trinidad, this value has been destroyed."

World GTL says Petrotrin and the Republic of Trinidad and Tobago wanted a small gas-to-liquid plant to maximize the value of the country's limited supply of natural gas.

Trinidad is home to a so-called eighth wonder of the world: Pitch Lake, a natural asphalt deposit in the coastal town of La Brea. Tens of thousands of tons of asphalt are extracted annually from the lake, which is about 100 acres and 250 feet deep.

According to legend, the winged Arawak god Pimlontas cursed La Brea, making it sink into the Earth, and replaced it with the "pitch" lake. Pimlontas was angry with the La Brea chief for stealing his daughter from the arms of her lover after she ran off and joined the lover's tribe.

Another legend tells that the lake devoured the Chayma tribe because they had feasted on sacred hummingbirds after a victory, forgetting that the birds housed the souls of their ancestors.

World GTL says it provided Petrotrin with the "know-how and technology" to build the plant, but sulfur emissions at Petrotrin caused plant evacuations, massive productivity loss and construction delays.

Sulfur dioxide emissions, which can be life-threatening at high levels, regularly contaminated the facility and became more intense as lender reliability tests approached.

Credit Suisse, which is not a party to the lawsuit, provided $125 million in financing, and the loan was to become mature and payable if World GTL failed to meet lender reliability tests by a certain date, according to the complaint.

The tests required the plant to produce almost 200,000 barrels of gas-to-liquid total and 2,250 barrels a day. As "shut-downs and protracted delays were a major cause of massive cost overruns and delays," World GTL says it did not expect to pass the tests.

Credit Suisse would grant an extension only if World GTL took out a new loan for $300 million at 14 percent interest, so the developer looked for a new lender, according to the complaint.

World GTL says that after it spent $900,000 negotiating a deal with Barclays Capital, Petrotrin forced a delay.

Petrotrin told World GTL "not to worry" as it would pay off the loan and prevent immediate default, according to the complaint. But instead of paying off the loan to Credit Suisse, Petrotrin allegedly paid a $16.2 million premium to acquire the loan by assignment.

"Clearly, Petrotrin's acquisition of the Credit Suisse Loan was intended to - and did - put a gun to the head of World GTL and WGTL-SL to wrest control of the gas-to-liquid plant from them," according to the complaint.

As intense sulfur emissions continued, killing one worker and forcing the plant to close again, Petrotrin's handpicked receiver quietly took control of the facility and barred access to World GTL.

"Although these emissions had been ongoing for over a month, reaching very high and unsafe levels, miraculously, once the receiver took over, the sulfur emissions ceased such that the receiver could order everyone back to work within a week of his taking over," the complaint states.

World GTL seeks $2.25 billion, alleging fraud, negligent misrepresentation and bad faith. It is represented by Robert Brodegaard with Thompson & Knight.

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