It is well known that nat­ur­al gas pro­duc­tion in Trinidad & To­ba­go has been on a down­ward trend for over a decade. This ob­vi­ous­ly means that the vol­ume of nat­ur­al gas con­sumed or processed has al­so de­clined. In 2015, the coun­try utilised nat­ur­al gas at a rate of just over 3.5 bcf/d but in 2024 this re­duced to just 2.4bcf/d.

This de­cline in con­sump­tion has in­volved some fa­cil­i­ties be­ing tak­en out of op­er­a­tion (for ex­am­ple At­lantic Train 1) and oth­er plants op­er­at­ing be­low ca­pac­i­ty. The de­clines in con­sump­tion have not been uni­form across sub-sec­tors, with the largest de­clines be­ing in the LNG sec­tor, while the util­i­sa­tion of nat­ur­al gas for elec­tric­i­ty has shown the low­est de­crease over the time (and has ac­tu­al­ly in­creased over past few years).

The largest user of nat­ur­al gas in T&T is the LNG in­dus­try, where nat­ur­al gas is su­per cooled to be loaded on­to LNG tankers for ex­port. In 2015, LNG used ap­prox­i­mate­ly 2 bcf/d but by 2024 this had been cut in half.

The nat­ur­al gas util­i­sa­tion of the petro­chem­i­cal sec­tor has al­so de­clined, but not as much as the LNG sec­tor. Us­age of nat­ur­al gas in the am­mo­nia and am­mo­nia de­rivates in­dus­tries de­clined by 20 per cent be­tween 2015 and 2024. Methanol pro­duc­tion had low­er rates of de­cline, falling by 5 per cent be­tween 2015 and 2024. Nat­ur­al gas used for iron and steel, which is in­clud­ed in the “oth­er” cat­e­go­ry in the graph, al­so fell by half, with the Arcelor Mit­tal plant be­ing closed.

These com­modi­ties are all ex­port­ed and this is what earns the ma­jor­i­ty of for­eign ex­change for the coun­try. So as the coun­try pro­duces less nat­ur­al gas, there is less pro­duc­tion of LNG, petro­chem­i­cals, LPG and iron and steel for ex­port, which has led to the crunch in forex avail­abil­i­ty.

The use of nat­ur­al gas for elec­tric­i­ty does not di­rect­ly gen­er­ate for­eign ex­change, though in some cas­es elec­tric­i­ty used in the man­u­fac­tur­ing sec­tor to pro­duce prod­ucts for ex­port can gen­er­ate forex. One of the rea­sons that Trinidad is able to dom­i­nate the Cari­com light man­u­fac­tur­ing sec­tor, is the avail­abil­i­ty of cheap elec­tric­i­ty.

Nat­ur­al gas us­age for elec­tric­i­ty has shown an in­ter­est­ing trend over the past decade. Over the pe­ri­od 2015 to 2018, nat­ur­al gas us­age for elec­tric­i­ty trend­ed down­wards, with the ad­vent of new­er high­ly ef­fi­cient com­bined-cy­cle plants at TGU in La Brea and the fall in de­mand from some large in­dus­tri­al cus­tomers (most sig­nif­i­cant­ly the Arcelor Mit­tal steel com­plex). How­ev­er, from 2019 on­wards there has been in­creased de­mand for pow­er from con­sumers, es­pe­cial­ly res­i­den­tial con­sumers, which has led to growth in de­mand for nat­ur­al gas in the pow­er sec­tor.

Typ­i­cal­ly, though not al­ways, nat­ur­al gas be­ing used for LNG gen­er­ates the high­est well­head gas prices for pro­duc­ers (and hence this flows through to the high­est re­turns to the State from tax­es and roy­al­ties). There have been times when am­mo­nia or methanol can gen­er­ate the high­est re­turns, de­pend­ing on spe­cif­ic mar­ket con­di­tions.

Nat­ur­al gas used in pow­er gen­er­a­tion gen­er­ates the low­est di­rect re­turns for the up­stream gas pro­duc­ers, and hence tax dol­lars for the State. This is why at a na­tion­al lev­el, the in­tro­duc­tion of re­new­able en­er­gy and en­er­gy ef­fi­cien­cy mea­sures to re­duce gas us­age in pow­er gen­er­a­tion make good eco­nom­ic sense and should be ac­tive­ly pur­sued.