Energy experts: T&T needs to find more gas for major projects

Several experts in the energy sector say while there is gas for the start of the projects unless new reserves are discovered there will not be gas to last the life of the projects. Over the last 12 months, the Government has announced five projects that, if implemented, will result in the use of an additional 400 million cubic feet of natural gas per day (mmcfd). The projects are the methanol to petrochemicals and the methanol to olefin, which together will use 265mmcfd, the AUM II, which would require 100 mmfcd, the CariSal plant and the Caribbean gas pipeline project . Several experts in the sector who spoke on condition of anonymity, told the Business Guardian that there is more installed plant life than proven and probable natural gas combined and, unless the country finds additional supplies, it could find itself in a crunch within the next decade. One source said: “No one can argue that there is no gas to start these projects, but the reality is that we have to find more gas to sustain them over the 20-year cycle of the project. Unless we decide that we are not going to renew the gas contracts of some of the other plants, we will not be able to sustain the projects without additional supplies.”

 

Energy consultant Anthony Paul agreed that the gas was not there to sustain the projects over their lifetime if the installed capacity is also kept going. Paul said if the country continued its downstream expansion, it will have to “either shut down plants or find additional reserves… “The facts are there and they are not complicated. We use in the order of 4.2 bcfd and the reality is on a scheduling timeline, even when you factor in the probable reserves position, we will have to find new gas or will have to decide not to renew the contractors of some older plants, or a combination of both.” The Business Guardian asked the NGC where the gas would come from for the projects, if there was a possibility that some less efficient plants will not have their gas contracts reviewed and how it planned to manage its gas allocation going forward? The company would only say the matter is being reviewed. In an e-mailed statement, NGC noted: “We are in the process of a comprehensive review being championed by the Ministry of Energy, which is also reviewing its policy on natural gas matters and will not be in a position to respond to the questions until such time as the studies mentioned above are complete.” But Paul said there is a need to ask the fundamental questions about who is determining what projects gas is being allocated for and what are the value considerations being made in choosing to go with particular projects over others.

 

“We need to ask these questions because if there is one thing that Alutrint proved to us is the stark reality that our gas is increasingly a scarce commodity, and while the Henry Hub has shown it is not as valuable in revenue terms, it is still strategically valuable.” The largest gas producer in the country, bpTT, said it was doing its part in seeking to increase resarves. “The company is investing heavily in an extensive seismic survey over our existing acreage to further unlock reserves in our shallow acreage and on completion of the production sharing contracts for the deepwater blocks, we will also begin the deepwater programme. “Both of these activities have the potential to add to medium- to long-term resources. Additionally, over the next five years, bpTT will continue to run a two-rig drilling campaign to prove up reserves in our existing acreage and allow us to maintain deliverability of our contracted volumes.  

Helena Innis-King, former director of resource management at the Ministry of Energy and Energy Affairs, told the Business Guardian that while, at present, there is a shortage of natural gas in the system, the shortage is temporary and is directly related to the upgrade works being undertaken by bpTT.

 

In an e-mail response, bpTT said it has been operating in T&T and needed to do significant work on its infrastructure to maintain its safety standards. “These are all part of our normal re-investment programme aimed at improving the safety, efficiency and reliability of our facilities. These activities will cause production levels to fall below historical averages.” Innis-King said: “There is a supply crunch at the moment and it is short-term and artificial.” She said the projects the Government has announced were merely replacing or a continuation of some of the projects the former administration had pursued.

She said the last government has graded the projects into A and B categories, with gas allocation being made based on the downstream and strategic benefits to the country. NGC has contracted an additional 550 mmcfd from the producers to meet projects, many of which have not come to fruition.  NGC president Andrew McIntosh explained that the problem is in the short-term. “In fact, we will be long on supply going forward,” McIntosh said.