Trinidad wants ‘meaningful’ cooperation to strengthen energy sector

Trinidad & Tobago said Tuesday that “meaningful collaboration and cooperation at all levels” was needed for oil and energy exporting countries to maintain a leading position in the global gas market.

Addressing the sixth summit of Gas Exporting Countries Forum, GECF, in Doha, Qatar, Prime Minister Dr Keith Rowley said that oil and gas will continue to play a significant role in meeting global primary energy requirements for the foreseeable future.

He told the conference that the COVID-19 pandemic had curtailed the domestic energy sector by delaying the implementation of new upstream projects.

“The issues brought on by the pandemic have been managed by the government in collaboration with the upstream and the recovery is on track. As a consequence several upstream projects, primarily gas projects came on stream in 2021 and a number of gas projects are in the pipeline for 2022,” said Rowley.

“In the medium to long term several gas projects are in the appraisal and sanctioning phases. These include deep-water projects with estimated gas reserves of 6.6 trillion cubic feet and the Manatee cross-border field, which adjoins the Venezuelan Loran field,” he said.

Natural gas has been the cornerstone of Trinidad’s economic development from the mid-1980s when it superseded oil as the primary hydrocarbon. The twin-island now has 10 ammonia plants, seven methanol plants and four LNG trains, all of which depend on natural gas as the primary feedstock.

“The transitioning of primary energy sources is not a new phenomenon. The Industrial Revolution has seen a shift from coal to crude oil and natural gas. The reality is that oil and gas will continue to play a significant role in meeting global primary energy requirements for the foreseeable future,” said the Trinidad premier.

A viable and sustainable petrochemical sector is important to Trinidad’s economy, but there are challenges, he added.

“On one hand, upstream producers have been requiring higher prices to adequately compensate for the higher production costs associated with operating in a mature hydrocarbon basin. On the other hand, we have a mature downstream petrochemical industry operating in a competitive global environment,” said Rowley.

To better understand and address the challenges and opportunities within the sector, Trinidad has engaged United Kingdom-based firm Gas Strategies Group Limited with a mandate to evaluate the gas value chain and to provide proposals for changes in policies, structure, regulation and governance of the gas value chain to sustain and maximise the value to the country from its gas resources.

MARKET SHIFT

Prior to the shale gas revolution, the United States was Trinidad’s principal market for LNG. Despite the market shifts, however, Rowley said the US continues to have an effect on gas pricing.

“The USA is no longer the principal market as Trinidad and Tobago LNG has been directed to a wider spectrum of markets. However, the majority of contracts are still based on Henry Hub, the US marker price. This situation is to the disadvantage of Trinidad & Tobago,” Rowley said.

The 2015 Gas Master Plan Report done for Trinidad by UK consultants Poten and Partners confirmed that the country lost billions of US dollars in potential revenue from LNG exports, the PM said, but noted that the country sees an opportunity to address the fallout.

“The government has been having dialogue with companies to ensure a more equitable sharing of LNG revenues. We now have an opportunity to correct this inequality consequent on the pending expiration of LNG licences and plans to restructure the LNG business in Trinidad & Tobago,” said Rowley.

“It is in situations like this that the value of the membership of Trinidad and Tobago in the GECF takes on added significance. The experience of the Forum which possesses 70 per cent of the world’s proven gas reserves, 44 per cent of its marketed production, 52 per cent of pipeline, and 51 per cent of LNG exports in the world is formidable and can be of immeasurable benefit to members,” he told the summit.

“If we are to maintain our leading position in the global gas market in this changing environment there must be meaningful collaboration and cooperation at all levels. “Given what is at stake I am confident that we will coalesce and continue as a cohesive force in this dynamic environment.”

CMC