Next year could see state-owned Na­tion­al Gas Com­pa­ny (NGC) hav­ing wind­fall prof­its be­cause it was pre­pared to ne­go­ti­ate hard with the down­stream petro­chem­i­cal com­pa­nies in­sist­ed En­er­gy Min­is­ter Stu­art Young.

Speak­ing dur­ing the bud­get de­bate in the Sen­ate Young al­so sought to play down the $400M failed at­tempt by the NGC to restart the At­lantic LNG Train 1 say­ing the mon­ey was al­ready re­cov­ered be­cause of strong ne­go­ti­a­tions.

Young:; “So all of what you’ve been hear­ing about loss­es at NGC and these wild ac­cu­sa­tions of loss­es and fig­ures of $400 mil­lion. These are com­plete false­hoods. So yes some­times busi­ness­es take risks, risk or gam­ble, and it doesn’t work out, that is the en­er­gy sec­tor. You know how many peo­ple drill dry holes and dry wells.

“But I stand here to­day and as­sure the peo­ple of T&T as we con­tin­ue to ne­go­ti­ate, as we’re do­ing right now with At­lantic LNG re­struc­tur­ing, we will find a way to re­cov­er, as we did for the first time with a bas­ket price of gas prices that was nev­er done be­fore. And the rev­enue we’ve earned by that, the in­creased en­hance rev­enue, by ne­go­ti­at­ing that and push­ing and fight­ing for that has dou­bled and tripled.”

The En­er­gy Min­is­ter told the Up­per House that the Gov­ern­ment had not dam­aged the down­stream sec­tor by the gas ne­go­ti­a­tion he and the Prime Min­is­ter Dr Kei­th Row­ley were in­volved in and that the con­stant clo­sure of petro­chem­i­cal plants last year was due to low in­ter­na­tion­al com­mod­i­ty prices.

He said: “When they had those com­mod­i­ty prices crash­ing they said no is Row­ley and Young went to Hous­ton and ne­go­ti­ate a bad gas price that was lead­ing to the dis­rup­tion at Point Lisas. Com­plete­ly false. I asked the pop­u­la­tion to lis­ten, since April of this year. Have you heard any­thing about plant shut­down at Point Lisas? The an­swer is no.”

Young’s state­ment came af­ter sev­er­al pants were shut down in 2019 and 2020 fol­low­ing com­plaints about both in­suf­fi­cient quan­ti­ties of nat­ur­al gas and the price.

In fact, one of the world’s largest pro­duc­ers of methanol, Methanex con­tin­ues to keep its Ti­tan methanol plant closed even in the face of ro­bust prices af­ter its CEO in­sist­ed he would not sign a deal for nat­ur­al gas if he did not feel the plant could be prof­itable .

Even as the Min­is­ter crowed about the NGC’s pro­ject­ed im­proved per­for­mance the state-owned en­ter­prise has qui­et­ly gone on the US mar­ket and bor­rowed the equiv­a­lent of $3.3 bil­lion. The Busi­ness Guardian has con­firmed from mul­ti­ple sources that the NGC bor­rowed US $489 mil­lion to fund T&TEC re­quire­ments, Caribbean Gas Chem­i­cal Ltd cash calls, work­ing cap­i­tal re­quire­ments, cap­i­tal ex­pen­di­ture re­quire­ments and up­stream projects in­clud­ing com­ple­tion of the pur­chase of Her­itage share in the Col­ib­ri project.

The fol­low­ing ques­tions were posed to the NGC’s pres­i­dent Mark Lo­quan on Sep­tem­ber 27 but up to press time he has not re­spond­ed.

1) ↓Is the NGC seek­ing to bor­row or has bor­rowed USD $489 mil­lion?

2) ↓Can the NGC say whether Citi or any oth­er fi­nan­cial in­sti­tu­tion is to place the loan?

3) ↓What is the in­ter­est rate and re­pay­ment pe­ri­od ?

4) ↓What are the funds to be used for?

5) ↓Did the NGC have the op­tion of util­is­ing its re­tained earn­ings?

With the UN cli­mate change con­fer­ence mere days away the Min­is­ter of En­er­gy is adamant that nat­ur­al gas re­mains the fu­el of choice to tran­si­tion be­tween fos­sil fu­els and re­new­ables.

He said: “It is the con­clu­sion of all that the tran­si­tion en­er­gy source is go­ing to be gas, and that is for­tu­nate for T&T and that we had the fore­sight, a cou­ple of decades ago, to move to gas pro­duc­tion in T&T and it is gen­er­al­ly ac­cept­ed that this will be the po­si­tion and gas will be the tran­si­tion en­er­gy com­mod­i­ty un­til at least 2050. That’s the hori­zon, we’re look­ing at,”

To prove his point the min­is­ter point­ed to the re­cent events that have caused a ma­jor spike in nat­ur­al gas prices, par­tic­u­lar­ly in Eu­rope.

“There was a slow­down in wind pat­terns, and it col­lapse the whole en­er­gy pro­duc­tion and elec­tric­i­ty pro­duc­tion. They then be­came a short­age of gas sup­ply in Eu­rope, and they went in­to a se­mi cri­sis. This has shot gas prices up glob­al­ly and that is a warn­ing that whilst we move away from the fos­sil fu­els, as we should, there is a tran­si­tion that needs to take place, so right now you’re see­ing for the first time in many decades, ex­treme­ly high gas prices. It’s led to a num­ber of con­se­quences in Eu­rope, and those coun­tries who had moved to­wards more re­liance on re­new­ables,” Young ar­gued.

“Due to this gas short­age, and the re­liance on re­new­ables that did not come through. Im­me­di­ate­ly they had to restart this coal to en­sures as they go in­to their win­ter months, there is elec­tric­i­ty be­ing pro­duced for heat­ing and man­u­fac­tur­ing and pro­duc­tion.” Young added.

He talked about the queues for fu­el in the UK as ev­i­dence that the world had to be care­ful and plan the emer­gence from fos­sil fu­el use.

The En­er­gy Min­is­ter told the Up­per House: “We saw the Prime Min­is­ter in the Unit­ed King­dom hav­ing to call out the army to dri­ve tankers to get oil to gas sta­tions, so let us not be fooled, let us not be wor­ried in T&T un­nec­es­sar­i­ly, the gov­ern­ment is aware that the globe is mov­ing more to­wards re­new­ables, but we’re al­so re­al­is­tic.

“We are al­so re­al­is­tic and you’re see­ing first-hand, this is not hy­po­thet­i­cal. The ef­fects of com­plete re­liance too ear­ly on re­new­ables, there must be a fall-back po­si­tion right now, that con­tin­ues to be gas. T&T has noth­ing to fear with re­spect to our oil and gas en­er­gy sec­tor, for the fore­see­able decades,” Young as­sert­ed.