Cur­tis Williams

The Na­tion­al En­er­gy Cor­po­ra­tion and Caribbean Gas Chem­i­cal Lim­it­ed (CG­CL) will on Mon­day sign a Project De­vel­op­ment Agree­ment for con­struc­tion of a US $850 mil­lion methanol and di-methyl ether com­plex at Union Es­tate in La Brea.This has been con­firmed by both the NEC and the Pres­i­dent and Group CEO of Neal and Massy Hold­ings Lim­it­ed Ger­vase Warn­er. Neal and Massy is a share­hold­er in a con­sor­tium led by Japan's Mit­sub­ushi Cor­po­ra­tion and this is a ma­jor step for­ward in the de­vel­op­ment of the project.

In an email re­sponse to ques­tions from the T&T Guardian, Warn­er said if the project gets fi­nal sanc­tion­ing it will end a decade-long drought in ma­jor down­stream in­vest­ments in T&T.In the last four months two ma­jor Gov­ern­ment flag­ship projects have failed in­clud­ing the US $5.3 bil­lion Sabic project and Carisal's US $450 mil­lion project. Sabic said it pulled out be­cause it could not reach agree­ment with the Na­tion­al Gas Com­pa­ny Lim­it­ed on the price of gas for the project and Carisal had dif­fi­cul­ties rais­ing fund­ing for their ven­ture.

Warn­er said while a term sheet has been agreed to, there is as yet no gas con­tract."A term sheet for gas sup­ply to this project has al­ready been ne­go­ti­at­ed and signed since De­cem­ber 2012. This term sheet will form the ba­sis for ne­go­ti­a­tion of a ful­ly-termed gas con­tract pri­or to the project mak­ing a fi­nal in­vest­ment de­ci­sion (FID)," he said.

Neal and Massy's CEO said over the next year the con­sor­tium will have to work hard to over­come sev­er­al key chal­lenges, in­clud­ing ac­qui­si­tion of a Cer­tifi­cate of En­vi­ron­men­tal Clear­ance (CEC), Front End En­gi­neer­ing and De­sign (FEED), a ful­ly-termed gas con­tract, an en­gi­neer­ing, pro­cure­ment and con­struc­tion con­tract (EPC), util­i­ty con­tracts and project fi­nanc­ing.

"We will need to work with a wide range of stake­hold­ers from the com­mu­ni­ty in La Brea to the Mit­subishi share­hold­ers in Japan. We look for­ward to work­ing with the me­dia as one of these key stake­hold­ers."The NEC said it ex­pect­ed that con­struc­tion will be­gin in the sec­ond quar­ter of 2014 and once com­plet­ed, the fa­cil­i­ty will be the first gas-based project at the Union Es­tate since the scrap­ping of the Alutrin smelter project by the ad­min­is­tra­tion.

Warn­er con­firmed this. He said: "We ex­pect the plant to start con­struc­tion as soon as a fi­nal in­vest­ment de­ci­sion is made. As we have point­ed out, there is much work to be done but we are hope­ful that with will­ing­ness of all stake­hold­ers to work ef­fi­cient­ly and quick­ly we will com­plete all the nec­es­sary pre­req­ui­sites in ap­prox­i­mate­ly one year. We hope to be in con­struc­tion mode by the sec­ond half of 2014."

He added that dur­ing con­struc­tion of the plants peak em­ploy­ment is ex­pect­ed to be 3,000 peo­ple. Dur­ing op­er­a­tions 180 peo­ple will be per­ma­nent­ly em­ployed by the project with a sim­i­lar num­ber in­di­rect­ly em­ployed.Asked if the re­cent gas cur­tail­ment had neg­a­tive­ly im­pact­ed the project Warn­er said the project de­sign takes in­to ac­count many key fac­tors in the lo­cal and glob­al en­vi­ron­ment and mem­bers of the con­sor­tium be­lieve that it will prove to be re­silient over the long life of the project.

"We do not be­lieve that the cur­rent tem­po­rary gas sup­ply de­mand im­bal­ances will af­fect our project up­on start-up in late 2016. With re­spect to gas prices we would not wish to prej­u­dice our up­com­ing ne­go­ti­a­tions by com­ment­ing on this sub­ject."He said methanol pro­duc­tion start­ed in 1984 and there are sev­en methanol plants op­er­at­ing in T&T. This coun­try is the largest ex­porter of methanol in the world.

"We be­lieve that the in­dus­try has a proven track record in suc­cess­ful­ly op­er­at­ing in T&T. Di­methyl ether (DME) is very sim­i­lar to LPG which we have been pro­duc­ing at the re­fin­ery for decades. We be­lieve that the demon­strat­ed track record of man­u­fac­ture and use of these prod­ucts will see this fa­cil­i­ty wel­comed by all stake­hold­ers."