The National Energy Corporation (NEC) has extra gas for two projects for which it has invited expressions of interest: one is natural gas to methanol and methanol to petrochemicals, and the other is natural gas to olefins. "To date, we judged a project to do natural gas into ammonia and downstream. We invited ten or 12 companies. At the end of the day, we evaluated three companies that eventually submitted bids, and we selected one using the criteria. People have a sense they know what the ground rules are in this game," said Frank Look Kin, technical adviser to the Minister of Energy and Energy Affairs. Look Kin delivered a presentation on the Government's criteria for downstream energy projects to investors on June 17 at the Trade and Investment Convention (TIC) at the Hyatt Regency Trinidad hotel, Port-of-Spain.
Look Kin, who's retired as president of the National Gas Company in 2009, said the Government asks all interested bidders for projects requiring the use of natural gas to provide a scope of works, a scope of the project that they propose for wanting to use natural gas. "There is no sense saying there's a tranche of gas allocated to a project of this type and, therefore, if we ask you for things you'd normally have to put in, that means you have already studied it, know what you want to do and what are the inputs, what are the directives, what are the conditions. "We go through things like the type of technology, the amount of gas you require, the utilities that are required, what are the products expected to come out of the project, what is the land requirement, manpower requirement from two sides, construction and permanent employment. Estimates of capital expenditure.
"What is very critical is financing because if you have a project that's five years, and if you don't have financing, the project doesn't go anywhere; it just remains an idea." He said interested bidders wanting to use gas for a project should demonstrate all the factors in the NEC-structured, point-scoring criteria-including finance-that was developed on behalf of the Ministry of Energy. "We have seen projects over the years, some of them have been stopped because it is a good idea, but they could not get it financed."
Environmental concerns
Look Kin said the Government wants bidders to indicate what might be the negative impacts of their project and what it will do to mitigate it. "What we want to know is the process you are making, what kind of impact it will have, especially what type of effluent will be coming out: solid, liquid or gas. The third is carbon capture. "I think it is very unfortunate that people quote statistics because we have so many ammonia and methanol plants in Trinidad, we have a very high amount of carbon dioxide released in Trinidad because in the process, you are basically taking natural gas and reforming it with steel, and what you are making is carbon monoxide and hydrogen. "The next step in the process is take the carbon monoxide, convert it into carbon dioxide, and release it. "What you are looking for is the hydrogen to make the methanol and ammonia. We have a relatively large amount. Then people judge us and say it's per capita. We only have 1.3 million people. But if it was done in China with 1.3 billion people..." Look Kin said, with a laugh.
Robust idea
The Government said bidders providing data based on the ground rules will allow it to determine which project is best for T&T's national development, said Look Kin, who was awarded Chaconia Gold in 2008 for his contribution to national energy development. He said a lot of projects have previously used natural gas, not as a fuel, but primarily as a raw material. He said all of the ammonia and methanol made in Trinidad use natural gas, and at least 60 per cent of the operating cost of an ammonia plant is really related to the fact that natural gas come in as a feed stock. "How much natural gas are you using to product X or product Y? Some of the older processes probably use about 45 million btu (British thermal units) to make one tonne of ammonia. "Today, you could get plants of efficiencies that make 33, so therefore you don't want somebody to come and say, well, I'm bringing old technology because you have plenty gas. That is why we have as a criteria the conversion ratio.
"Obviously, if you are comparing one single industry, the only thing you are looking at is the kind of technology you are using to see whether you are efficiently using the natural gas. "Sometimes, new technology gives you a jump, gives you an advantage over someone else because, in fact, that may be the factor that causes your plant to be better than a next person's plant." Look Kin said T&T was one of the forerunners in the world when it began using natural gas as a reducing agent to make DRI-direct reduced iron. "Sometimes, you have to distinguish yourself in today's world of being slightly ahead of the competition."
Downstream projects
Look Kin said the majority of ammonia and methanol produced in Trinidad go no further. "It doesn't go further downstream, with the exception of the recent plant that the Clico Energy Group. All the other ammonia plants, they are stuck with ammonia. At one point, one of them did urea. All of them did ammonia, stopped there, and what the Government is saying is we need to have more value-added in T&T and, therefore, we are going to judge how many secondary steps or tertiary steps you are going, trying to get closer downstream to the final market place. "That is what this is trying to judge how far downstream you're going to go and not just stop at what we call first time petrochemicals, basically ammonia, methanol. "We want you to go further downstream, hopefully, or employment opportunities, more national development, rather than just export firstline petrochemicals as your product," Look Kin said.