The planners of the CariSal plant have put it on the market, and have three prospective buyers, but say it is now unlikely to be built in T&T.
CariSal's vice president of strategy and business development, Kristine Thompson, confirmed the project was now for sale.
In an interview with the Business Guardian, Thompson said, "We have put up the project for sale and there are three potential buyers, but it is now unlikely that it will be built in T&T. As you know, at the time of the project the gas price was competitive, but now you can shale gas in the US at cheaper prices and it's available in abundance.
"In addition, we had difficulty raising the financing locally and those things have contributed to the likelihood that the project will not happen in T&T."
Thompson said the project proponents were selling "all the development assets, which are the engineering plans, technology, project contracts, including gas contract, environmental and other approvals."
She explained that if the plant was being built outside T&T, the gas contract and environmental clearance cannot be sold.
Asked for a response to the CariSal news, the Energy Ministry directed all questions to the National Gas Company (NGC).
In an e-mailed response, the NGC noted, "The CariSal project was impacted by developments external to T&T and the National Gas Company. The issues experienced with this project have no impact on any other downstream project negotiations for T&T."
This view was mirrored by the president of the Energy Chamber, Dr Thackwray Driver, who said the project had problems external to T&T.
"Our understanding is that the project could not finalise financing. The fact that is not taking place is not as a result of conditions in T&T, but rather the global issues and the structuring of the project."
On the question of T&T's continued competitiveness as a destination for investment in the downstream sector, the NGC insisted it had been nimble in adapting to the changing global environment and that the country remains a good place for investment.
The company responded: "T&T remains a very competitive location for energy projects with a long-term perspective in spite of the production of US shale gas. The National Gas Company continues to align its business model to the constantly changing global gas environment."
Energy consultant Tony Paul argued there was a need for the Government and state agencies to determine what industries this country could attract and support based on what will be higher gas prices.
Paul said for too long the Ministry of Energy had not focused on the real advantage this country had and on what kind of industry T&T wanted to build. He said the challenge was not limited to the downstream sector but also upstream, where companies used T&T to speculate by bidding and acquiring blocks and then selling them to other companies.
Paul also pointed to the decision of the Government to shut down the Alutrint project as another bad move that was hurting the energy sector, saying the decision has dented the confidence of investors that agreements were sacred in T&T and that projects would continue even if there were a change of government. Paul said there was an urgent need to de-politicise the sector.
Driver pointed out that the lack of projects getting off the ground pre-dated this administration.
"There has been no new downstream plant constructed since the MHTL AUM 1 project. That started construction in 2006, about seven years ago. The AUM 1 plant was actually approved a decade ago, in 2002/2003.
"During that decade there have been many projects announced that have not been constructed. There are different reasons over that decade why plants have not moved from plans to implementation and each case needs to be looked at on its merits. In some cases projects have not progressed because of company-level issues, in other cases it has been due to politics and in others because of changing global circumstances in terms of both markets and construction costs."
Driver added that there were always things that could be done better and the Ministry of Energy was currently reviewing policy on downstream industrialisation.
History of the project
In his 2011/2012 budget presentation, former Finance Minister Winston Dookeran had said construction of the CariSal plant would start this year."The Government, in conjunction with the US firm CariSal, will construct a plant to produce calcium chloride, caustic soda and other related products for the domestic market as well as markets in the Caribbean, North America, West Africa and Latin America. Construction of the CariSal plant would begin in 2012, at an estimated cost of US$430 million, with the potential to create more than 200 jobs during construction and operation."
No mention was made of the project by the new Minister of Finance Larry Howai in the 2012/2013 budget.
A memo produced by the technical staff for the Minister of Energy dated August 21, days before the presentation of the 2012/2013 budget, noted there was little upside potential in the sales price of the products Carisal would be producing and this was a challenge for the project promoters.
The memo concluded, "Based on this new development, it appears that unless there is a major shift by IDB, the project would fold."