US Chargé d’Af­faires Philip Kern says Trinidad and To­ba­go’s down­stream en­er­gy sec­tor re­mains im­por­tant to both coun­tries, par­tic­u­lar­ly as the coun­try works to se­cure ad­di­tion­al nat­ur­al gas sup­plies.

Kern was speak­ing at a Down­stream En­er­gy In­dus­try Re­cep­tion at the US Chief of Mis­sion Res­i­dence in Port of Spain on Tues­day night.

He said the re­cep­tion was or­gan­ised to pro­vide an op­por­tu­ni­ty for the Na­tion­al Gas Com­pa­ny of Trinidad and To­ba­go (NGC), down­stream com­pa­nies and oth­er stake­hold­ers to meet out­side of their usu­al ne­go­ti­a­tions.

“It al­so gives us a chance to hear di­rect­ly from Ger­ald about where he sees the in­dus­try go­ing, and for the Em­bassy to say thank you to all of you for the work you do here,” Kern said.

Ad­dress­ing NGC Chair­man Ger­ald Ramdeen, Kern said he took over the com­pa­ny at a dif­fi­cult time.

“You took over NGC at a dif­fi­cult time. Gas sup­ply was tight. The com­pa­ny was un­der pres­sure to im­prove its com­mer­cial po­si­tion. And the down­stream com­pa­nies in this room were try­ing to make in­vest­ment de­ci­sions with­out much cer­tain­ty about how much gas would be avail­able, at what price, or for how long,” he said.

Kern said the last round of ne­go­ti­a­tions had been dif­fi­cult and sev­er­al of the re­sult­ing con­tracts were short­er than the com­pa­nies would have pre­ferred.

“The last round of ne­go­ti­a­tions was hard. I know the pro­duc­ers here felt that. Sev­er­al of the re­sult­ing con­tracts were short­er than they would have pre­ferred. I sus­pect Ger­ald would agree that no­body wants to ne­go­ti­ate the fu­ture of an in­dus­tri­al plant a year or two at a time,” he said.

He said NGC was al­so work­ing on the sup­ply side of the prob­lem.

“Over the past year, Ger­ald and his team have re­newed im­por­tant re­la­tion­ships with up­stream pro­duc­ers, pushed for­ward new sources of do­mes­tic sup­ply, and put se­ri­ous ef­fort in­to the cross-bor­der re­sources that could even­tu­al­ly bring more gas in­to Trinidad and To­ba­go,” Kern said.

“That work does not solve the short­age overnight. Gas projects take years. But the on­ly way to have more gas avail­able three or five years from now is to do that work to­day.”

Kern said if that up­stream work de­liv­ers as planned, the next round of down­stream ne­go­ti­a­tions should take place against a bet­ter sup­ply pic­ture.

“I hope that gives NGC and the com­pa­nies here room to think fur­ther ahead. These plants are cap­i­tal-in­ten­sive busi­ness­es. They need enough cer­tain­ty to main­tain equip­ment, plan turn­arounds, in­vest, and de­cide what comes next,” he said.

Kern said the Unit­ed States had a par­tic­u­lar rea­son to care about the health of the in­dus­try.

“Trinidad and To­ba­go is an im­por­tant fer­til­iz­er sup­pli­er to the Unit­ed States. Am­mo­nia and urea pro­duced here even­tu­al­ly reach Amer­i­can agri­cul­ture. So, when I say we like the down­stream, part of the rea­son is very prac­ti­cal. It helps feed peo­ple in our coun­try,” he said.

He al­so out­lined the eco­nom­ic im­por­tance of the down­stream sec­tor to Trinidad and To­ba­go.

“But there is al­so a strong eco­nom­ic case for the down­stream here in Trinidad and To­ba­go,” Kern said.

“Gas that goes in­to an am­mo­nia or methanol plant earns rev­enue for NGC. The plant pays tax­es. Its em­ploy­ees pay in­come tax­es. It sup­ports the con­trac­tors who main­tain the equip­ment, the truck­ing firms, the cater­ers, the in­sur­ers, the port, and a much larg­er in­dus­tri­al econ­o­my around Point Lisas.”

Kern said there was “a cred­i­ble ar­gu­ment” that, over a full price cy­cle, a mol­e­cule of gas used in the down­stream could re­turn as much val­ue to Trinidad and To­ba­go as a mol­e­cule sold as LNG.

“That ar­gu­ment is hard­er to make to­day with LNG prices where they are. But to­day’s LNG price will not last for­ev­er, and nei­ther will to­day’s am­mo­nia or methanol price,” he said.

“That is why keep­ing a vi­able down­stream mat­ters.”

Kern said the down­stream sec­tor al­so strength­ened the case for up­stream in­vest­ment.

“An in­vestor con­sid­er­ing a new gas project needs some­where to land that gas. Trinidad and To­ba­go al­ready has a large in­dus­tri­al mar­ket, built over fifty years, ready to take it,” he said.

“That ex­ist­ing in­dus­tri­al base is an ad­van­tage when Trinidad and To­ba­go com­petes for up­stream in­vest­ment.”

Kern said the US Em­bassy would con­tin­ue to sup­port Amer­i­can com­pa­nies in­ter­est­ed in Trinidad and To­ba­go.

“The Em­bassy will con­tin­ue to sup­port Amer­i­can com­pa­nies that want to in­vest in Trinidad and To­ba­go, sup­ply equip­ment and tech­nol­o­gy, de­vel­op re­sources, and build com­mer­cial part­ner­ships,” he said.

“We want the Unit­ed States to be the part­ner Trinidad and To­ba­go turns to as it de­vel­ops its en­er­gy re­sources, and we want the in­vest­ments made here to sup­port pros­per­i­ty in both our coun­tries.”