Eu­gene Tiah

It is abun­dant­ly clear that the Na­tion­al Gas Com­pa­ny of T&T (NGC), over its 51 years of ex­is­tence, has done a very good job in max­imis­ing the val­ue of the coun­try’s nat­ur­al gas re­sources for the cit­i­zens of the coun­try. Both ma­jor po­lit­i­cal par­ties that have gov­erned since in­de­pen­dence are ful­ly aligned on the val­ue-adding role of the NGC. How­ev­er, as ex­pect­ed, each par­ty would claim that they have done a bet­ter job un­der their stew­ard­ship in max­imis­ing the val­ue.

Through­out its his­to­ry, NGC has added val­ue by ful­fill­ing dif­fer­ent roles. Its ini­tial pur­pose, when found­ed in 1975, was to pur­chase, com­press, trans­port, and sell nat­ur­al gas to com­mer­cial and in­dus­tri­al users. That tran­si­tioned in the 1990s to be the “prime mover in gas-based de­vel­op­ment” which in­clud­ed a piv­otal role in the con­struc­tion of liq­ue­fied nat­ur­al gas (LNG) trains and at­tract­ing in­ter­na­tion­al in­vestors to es­tab­lish world-scale am­mo­nia, methanol, and urea plants. That fur­ther ex­pand­ed in the 2000s to in­clude back­ward and for­ward in­te­gra­tion to hold eq­ui­ty in up­stream oil and gas pro­duc­tion and methanol and LNG mar­ket­ing/trad­ing.

In each of these phas­es, NGC was able to add sig­nif­i­cant val­ue. Recog­nis­ing the chal­lenges ahead with sus­tain­abil­i­ty in a world that needs to wean it­self off hy­dro­car­bon fu­els over time, NGC proac­tive­ly in­cor­po­rat­ed a sus­tain­abil­i­ty fo­cus in­to its pur­pose and em­braced the green tran­si­tion.

Ad­di­tion­al­ly, and im­por­tant­ly, NGC has his­tor­i­cal­ly added val­ue as a ca­pac­i­ty builder and cor­po­rate cit­i­zen through ed­u­ca­tion and train­ing and so­cial de­vel­op­ment.

It is very im­por­tant to un­der­stand that prof­it is but one source of val­ue. Val­ue has a time di­men­sion and usu­al­ly refers to val­ue to share­hold­ers/stake­hold­ers. When com­pa­nies state that their pur­pose is to max­imise share­hold­er val­ue, they mean val­ue in the medi­um/long term.

Busi­ness­es that max­imise prof­its in one year by ex­tract­ing as much val­ue from cus­tomers as they can, are at the risk of los­ing those cus­tomers. Re­al­is­ing lit­tle val­ue in prof­its be­yond that year isn’t max­imis­ing share­hold­er val­ue.

There is no pauci­ty of cur­rent me­dia com­men­tary on the cur­rent state of the nat­ur­al gas in­dus­try in T&T and ad­di­tion­al­ly there is an ever-in­creas­ing com­men­tary on the ap­pro­pri­ate­ness of T&T’s strat­e­gy to meet the chal­lenges that are cur­rent­ly be­ing faced.

An emerg­ing view seems to be that there is an ap­par­ent NGC fo­cus on max­imis­ing short-term prof­its. This may or may not be cor­rect and, if cor­rect, it may or may not be a good strat­e­gy.

While NGC was pro­gress­ing through its many phas­es from in­cep­tion, con­cur­rent changes were tak­ing place in T&T’s nat­ur­al gas re­sources, which, as ex­pect­ed, were mov­ing from a state of abun­dance to a nat­ur­al de­cline giv­en the fi­nite na­ture of these re­sources.

Not on­ly was there a nat­ur­al de­cline with some steep dips in nat­ur­al gas pro­duc­tion, but ad­di­tion­al­ly what was re­plac­ing that was be­ing de­plet­ed and was get­ting more ex­pen­sive be­cause of a com­bi­na­tion of in­fla­tion­ary pres­sures, great com­plex­i­ty and sub­sur­face chal­lenges and dis­ec­onomies of scale.

This re­al­i­ty drove the sig­nif­i­cant re­duc­tion in the term of the up­stream-to-NGC sup­ply agree­ments and con­se­quent­ly the NGC to down­stream-com­pa­ny sup­ply agree­ments.

In 2017, the term of those agree­ments was for five years, fol­lowed in 2022/2023 by a term of three years and I be­lieve the agree­ment be­tween NGC and down­stream com­pa­nies in 2025/2026 is cur­rent­ly for 1 year... or a lit­tle more than six months, in one case.

Ex­ter­nal­ly, the mar­kets for the com­modi­ties (am­mo­nia, DRI, LNG) pro­duced in T&T were al­so trans­form­ing. The USA, with its shale gas rev­o­lu­tion, was trans­form­ing from an im­porter to an ex­porter of prod­ucts pro­duced in T&T and Eu­rope was ef­fect­ing changes to ad­dress the dri­ve to­ward a low­er car­bon fu­ture through their car­bon bor­der ad­just­ment mech­a­nism (CBAM). All re­sult­ing in a sig­nif­i­cant chal­lenge for the down­stream pro­duc­ers in T&T.

Mean­while, as ex­pect­ed, in­ter­na­tion­al down­stream pro­duc­ers in T&T recog­nised this trend and mit­i­gat­ed the risk of re­ly­ing sole­ly on T&T pro­duc­tion. They de­vel­oped and ex­pand­ed pro­duc­tion in oth­er lo­ca­tions, par­tic­u­lar­ly where nat­ur­al gas was abun­dant and com­pet­i­tive­ly priced, in­fra­struc­ture and per­son­nel re­sources were read­i­ly avail­able and es­tab­lished chan­nels led to good mar­kets.

Quot­ing from a piece by Rob Nor­ton on un­in­tend­ed con­se­quences– “The law of un­in­tend­ed con­se­quences, of­ten cit­ed but rarely de­fined, is that ac­tions of peo­ple, and es­pe­cial­ly of gov­ern­ments, al­ways have ef­fects that are unan­tic­i­pat­ed or un­in­tend­ed. Econ­o­mists and oth­er so­cial sci­en­tists have heed­ed its pow­er for cen­turies; for just as long, politi­cians and pop­u­lar opin­ion have large­ly ig­nored it.”

Is what we are cur­rent­ly wit­ness­ing with the shut­down of the Nu­trien fa­cil­i­ties, the de­lays in ne­go­ti­a­tion of down­stream con­tracts, the ne­go­ti­a­tion of high­er nat­ur­al gas prices and the short tenure of the agree­ments in ag­gre­gate the “ca­nary in the coal mine” warn­ing of more dire down­stream unan­tic­i­pat­ed con­se­quences on the im­me­di­ate hori­zon?

Or is this a short-term chal­lenge which will be ad­dressed when the Man­a­tee, Man­akin and Venezue­lan gas (Drag­on, Lo­ran and Cocuina) be­comes avail­able start­ing with Man­a­tee in late 2027 fol­lowed in 2028 and 2029 with the oth­er gas sup­plies?

Would re­newed con­tracts in 2027 be for a longer term and pos­si­bly bet­ter pric­ing terms?

In late 2023, the me­dia pub­lished an ar­ti­cle stat­ing that NGC signed an amend­ed sup­ply agree­ment for gas from Man­a­tee pro­duc­tion for its down­stream cus­tomers for the medi­um term - https://me­dia.ngc.co.tt/me­dia-re­lease-ngc-and-shell-sign-amend­ed-gas-sales-con­tract-to-in­clude-man­a­tee-gas.

NGC was sig­na­to­ry to a sup­ply agree­ment for Venezue­lan Drag­on gas. Re­cent­ly NGC in May 2026 en­tered a gas sup­ply agree­ment with EOG for a two-year pe­ri­od for its down­stream cus­tomers, in­clud­ing pow­er gen­er­a­tion and for LNG.

NGC should there­fore have a much bet­ter un­der­stand­ing of what is like­ly to oc­cur when down­stream nat­ur­al gas con­tracts come up again for re­new­al in 2027.

The clo­sure of down­stream fa­cil­i­ties at Point Lisas will have a dev­as­tat­ing im­pact on the econ­o­my of T&T, par­tic­u­lar­ly on the di­rect em­ploy­ment which it pro­vides for close to 4,000 peo­ple. The LNG fa­cil­i­ties em­ploy rough­ly 1/8 of this num­ber. Fur­ther, there is the mul­ti­pli­er ef­fect with ser­vices etc. which can be mul­ti­ples of X 3 to X 4.

The im­pact on the ad­ja­cent com­mu­ni­ties in the ar­eas that ben­e­fit from the mul­ti­pli­er ef­fect will be equal­ly dev­as­tat­ing; ar­eas like Cou­va/Cal­i­for­nia and pos­si­bly as far as Ch­agua­nas. The stakes are high and there should be no ef­fort spared to un­der­stand the con­se­quences of any strat­e­gy that is de­vel­oped and im­ple­ment­ed.

The NGC board, the Min­istry of En­er­gy and En­er­gy In­dus­tries and, more broad­ly, the gov­ern­ment have a very chal­leng­ing sit­u­a­tion to man­age. They have the man­date of the peo­ple to gov­ern and with that man­date, we ex­pect them to for­mu­late and im­ple­ment a ro­bust strat­e­gy based on rel­e­vant da­ta and sound analy­sis con­duct­ed by in­dus­try ex­perts. In such a high stakes game no less is ex­pect­ed.

The pres­sure on the Min­is­ter of En­er­gy must be im­mense to as­sure that the NGC strat­e­gy is in­deed ro­bust. The time spent in en­gag­ing in­dus­try ex­perts, re­view­ing da­ta and analy­sis and the long hours de­vot­ed to dis­cussing and de­bat­ing the NGC strat­e­gy must be ex­haust­ing for the min­is­ter and his team and the NGC Board and its ex­ec­u­tive man­age­ment.

The coun­try un­der­stands and ap­pre­ci­ates the per­son­al sac­ri­fices re­quired by the long work­days, in­clud­ing work on week­ends and the cog­ni­tive­ly drain­ing ef­forts to leave no stone un­turned to avoid any unan­tic­i­pat­ed and un­in­tend­ed con­se­quences that could be dev­as­tat­ing for T&T.