Raphael John-Lall

Methanex Cor­po­ra­tion hav­ing to idle its methanol plant in T&T is the lat­est ex­am­ple of the de­cline of T&T’s en­er­gy in­dus­try.

This is the view of Dr Ein­stein Mil­lán Ar­cia, whose con­sul­tan­cy is based in the Unit­ed States and is a Venezue­lan en­er­gy an­a­lyst, con­sul­tant and for­mer high-rank­ing man­ag­er at the state-owned oil com­pa­ny, PDVSA.

At the end of June, Guardian Me­dia re­port­ed that Methanex Cor­po­ra­tion an­nounced that it will in­def­i­nite­ly idle its Ti­tan methanol plant in T&T af­ter fail­ing to se­cure a new nat­ur­al gas con­tract with the Na­tion­al Gas Com­pa­ny (NGC).

The Van­cou­ver-based com­pa­ny stat­ed that the ex­ist­ing gas sup­ply agree­ment for the Ti­tan fa­cil­i­ty, which has a pro­duc­tion ca­pac­i­ty of 860,000 tonnes per year, ex­pires in the third quar­ter of 2026 and no re­place­ment agree­ment could be reached.

Methanex’s Pres­i­dent and CEO Rich Sum­n­er said the de­ci­sion was dri­ven by the coun­try’s on­go­ing gas sup­ply chal­lenges.

Guardian Me­dia al­so re­port­ed that En­er­gy and En­er­gy In­dus­tries Min­is­ter Dr Roodal Mooni­lal said the door re­mains open for Methanex to re­sume op­er­a­tions.

Mil­lán Ar­cia be­lieves that the sit­u­a­tion around the Point Lisas In­dus­tri­al Es­tate “con­tin­ues to wors­en.”

“As do­mes­tic oil and gas pro­duc­tion con­sis­tent­ly de­clines, en­er­gy feed­stock to the in­dus­tri­al com­plex is not on­ly be­ing scarcer, but in­creas­ing­ly ex­pen­sive, ad­verse­ly im­pact­ing cash flow per­for­mance to most petro­chem­i­cal fa­cil­i­ties in the com­plex...Ti­tan plant could re­main idled in a pre­served state in case gas sup­ply con­di­tions favour a restart in the fu­ture, al­though in our opin­ion it is high­ly un­like­ly that the sit­u­a­tion im­proves while Kam­la Per­sad-Bisses­sar re­mains as Prime Min­is­ter.”

He point­ed out that as of June 2026, sev­er­al ma­jor methanol and am­mo­nia/urea plants at Point Lisas have re­duced or end­ed op­er­a­tions or are cur­rent­ly un­der con­trolled shut­down. These in­clude: the Methanex At­las Methanol Plant, which has been idled since Sep­tem­ber 2024; the five-plant Nu­trien am­mo­nia/urea com­plex and sev­er­al of the plants in the Pro­man fa­cil­i­ty.

He iden­ti­fied the pri­ma­ry caus­es as be­ing chron­ic nat­ur­al gas sup­ply short­ages, un­eco­nom­ic feed­stock pric­ing and NGC con­tract dis­putes, amidst a very con­test­ed glob­al mar­ket, and grow­ing geopo­lit­i­cal en­tropy, par­tic­u­lar­ly with Venezuela, coun­try which hap­pens to be the on­ly re­al­is­tic short-term op­tion for T&T.

He said key ex­po­sure to T&T con­tin­ues be­ing the per­sis­tent nat­ur­al gas sup­ply short­ages, and un­eco­nom­ic do­mes­tic feed­stock prices, dri­ven by de­cay­ing re­main­ing oil and gas re­serves, com­bined with up­stream high lift­ing and pro­duc­tion re­de­vel­op­ment costs, par­tic­u­lar­ly from very ma­ture and com­plex deep­wa­ter as­sets.

He al­so said that gas pro­duc­tion has fall­en sig­nif­i­cant­ly from the ~4.3 Bcf/d reached dur­ing late 2009, to re­cent av­er­ages of ~2.4 Bcf/d caus­ing short­falls for down­stream de­mand and this per­sis­tent de­cline in do­mes­tic oil and gas pro­duc­tion has led to feed­stock scarci­ty, high­er man­u­fac­tur­ing costs, and re­duced petro­chem­i­cal out­put.

NEW NOR­MAL

Mil­lán Ar­cia ar­gued that “T&T must face its new re­al­i­ty” as the num­ber of ma­ture fields with con­sis­tent­ly high­er re­de­vel­op­ment costs, es­pe­cial­ly for deep­wa­ter as­sets, abun­dant­ly in­creas­es, while mak­ing pro­duc­tion, in­dus­tri­al­i­sa­tion, and mar­ket­ed gas, un­eco­nom­i­cal.

He ex­pressed pes­simism say­ing that he does not see a turn around in T&T’s en­er­gy sec­tor any­time soon.

“Fac­tu­al­ly, T&T should not ex­pect this sit­u­a­tion to change in the near fu­ture, as do­mes­tic proven oil and gas re­serves de­plete, and fresh gas nev­er shows. As soon as gas pro­duc­tion peaked in the neigh­bor­hood of 2010, T&T politi­cians have of­fered fresh pro­duc­tion or new gas that so far has not ar­rived.

“Among these emp­ty of­fers; the failed off­shore deep­wa­ter round bids dur­ing of 2010-2015, the gas from Shell-Ca­lyp­so project, the Drag­on gas agree­ment, the 2014, 2024 nat­ur­al gas mas­ter plans, the Grena­da Nut­meg gas field, and now, the pro­ject­ed-to-re­cov­er, Mooni­lal fore­cast from the ma­ture-deep­wa­ter as­sets and that T&T’s oil out­put is pro­ject­ed to climb to 74,600 b/d by 2029.”

Dark days ahead

In June, En­er­gy Min­is­ter Mooni­lal said ne­go­ti­a­tions be­tween Methanex and NGC over gas pric­ing and al­lo­ca­tion had failed to pro­duce an agree­ment. How­ev­er, he not­ed that the com­pa­ny’s de­ci­sion to pre­serve the Point Lisas fa­cil­i­ty in a “restart-ready” con­di­tion left room for fu­ture op­er­a­tions if gas sup­ply con­di­tions im­prove.

He al­so not­ed that the NGC had suc­cess­ful­ly con­clud­ed gas ne­go­ti­a­tions with more than a dozen down­stream op­er­a­tors, al­though dis­cus­sions with Methanex broke down over the terms of ex­tend­ing its agree­ment.

While Mooni­lal re­mains op­ti­mistic de­spite the cur­rent chal­lenges fac­ing the en­er­gy sec­tor, for­mer en­er­gy min­is­ter Stu­art Young is us­ing the Methanex ex­am­ple as an­oth­er ex­am­ple of T&T’s en­er­gy in­dus­try’s de­cline.

In Face­book post on Wednes­day, Young called the lat­est de­vel­op­ment a “sad day” for T&T’s en­er­gy sec­tor as Methanex com­mences its in­def­i­nite shut down and that Ti­tan is be­ing tak­en of­fline.

He claimed that this was al­lowed to hap­pen be­cause of the Gov­ern­ment’s in­ac­tion.

“This shut down is due to the Kam­la Per­sad-Bisses­sar Gov­ern­ment’s in­abil­i­ty to ne­go­ti­ate com­mer­cial terms - in­com­pe­tent and un­so­phis­ti­cat­ed. The PNM ad­min­is­tra­tion man­aged to get com­mer­cial ne­go­ti­a­tions done from 2015-2025 keep­ing our gas sec­tor go­ing with jobs, forex earn­ing and ben­e­fits to T&T. In less than a year the UNC has de­stroyed our en­er­gy sec­tor.”