Most people understand that the energy sector is the key to improving Trinidad and Tobago’s economic fortunes in the short run. With the closure of Train 1, Atlantic LNG plants now have a nameplate capacity of 11.5 million metric tons per year. To operate at this level, the plants require a daily natural gas supply of between 1.6 and 1.9 billion cubic feet (bcf). Operating at full capacity, the petrochemical plants need a daily natural gas supply of 1.1 bcf, while power generation (electricity) needs approximately 300 million cubic feet (mmcf).
For the first three months of 2026, domestic natural gas production in T&T averaged 2.4 Bcf/ meaning there is not enough gas to keep all the plants open, which explains why plants in Pt Lisas are closed. The Atlantic LNG (ALNG) facility has historically operated well below its maximum capacity for most of the last seven years. The strategic problem is gas supply, not a lack of plant infrastructure. Hence the importance of the Manatee project, additional production from new wells and Venezuelan gas.
While prices remain high for petrochemicals and LNG, the conundrum is that tax revenues cannot grow if output volumes do not grow. NGC’s improved financial results are primarily due to higher international prices, not efficiency improvements or increased gas supply. The difficulty is that there is a long lead time between exploration, discovery and production. Whilst Manatee is expected to produce approximately 600 mcf/d, it will take time to ramp up production to that level. Manatee is not a solution to the gas shortage. It only ameliorates the position. This explains the Planning Minister’s comment that 2027 will be another difficult year, a tacit implication that 2026 has also been difficult.
Similarly, increased gas production does not automatically give the downstream more gas. The major gas producers Shell and BP are 90% owners of Atlantic and prioritise supplying ALNG. Despite its name, NGC can only supply gas to the downstream petrochemical sector in accordance with the natural gas it is contracted to buy from Shell and BP. Therefore, the upstreamers, BP and Shell, are in control.
This is why one must be cautious in extolling the likely benefits that could accrue to T&T from Venezuelan gas. Monetisation of the Loran Phases 1 and 2 depends on BP and Shell’s agreement with Venezuela. T&T has an interest in the outcome but was not represented at the discussions. Not having the proverbial seat at the table severely limits GORTT’s ability to influence the outcome to suit the country’s best interests. There is little choice but to wait and hope for the best outcome.
The important point is that Manatee is principally a T&T gas-supply project, whereas Loran Phase 2 is potentially a regional gas-supply/export project. The Manakin/Cocuina field is a BP-led consortium with NGC as a junior partner (20% participating interest). The field is in an early discovery/evaluation phase. BP and NGC completed seismic data collection, which dictates the layout and total number of development wells required to achieve the targeted peak production of 300 to 350 million standard cubic feet per day (mmscf/d).
The question is how quickly Shell or BP and its partners will turn these resources into deliverable gas, and whether T&T’s infrastructure will be used as the monetisation route. It is not clear how this will develop. The additional complication is that gas in Venezuelan waters is strictly tied to US foreign policy and Treasury Department rules, meaning that the US sanctions hurdle is an ongoing complication that requires negotiation.
These facts complicate the Finance Minister’s options and delivery capacity. In his 2026 Budget speech, he repeated the line “promises made, promises kept” many times. However, public sector union settlements remain “unsettled.” The Budget allocations did not provide for the 2014-19 backpay. From comments by various public-sector unions, it appears that the new salary ranges have not yet been implemented. Negotiations/settlements for the 2025 period are still ongoing, compounding the financial backlog.
This is unsustainable. Nonpayment of VAT refunds and delayed payments to trade creditors have a negative effect on private-sector cash flow, which ultimately leads to project deferrals and cancellations and negatively impacts GDP growth. Delaying payments of “settled” public sector wage agreements poisons public sector productivity, negatively impacts the labour relations climate, and affects business confidence and investment.
The Finance Minister’s position is as compromised as his predecessor’s, and his promises are bigger than his means. Like Mr Colm Imbert, he has attempted to plug the revenue-expenditure gap by drawing down from the Heritage and Stabilisation Fund (HSF) and by borrowing. A combined total of US$510.78 million (approximately TT$3.46 billion). US$260.78 million (TT$1.77 billion) was withdrawn before September 2025, and US$250 million (TT$1.69 billion) was withdrawn to fund some of the promises. One can expect a similar drawdown before September 30th. A portion of the US$800 million bond issue earlier this month went toward general budgetary and fiscal deficit funding needs.
Increasing the T&T national debt, now at 89% of GDP, will have severe negative consequences. Debt service payments now account for 20% of government expenditure, limiting its flexibility. There are no easy options for quickly growing the economy, and many difficult decisions must be made, including the foreign exchange issue.
Mariano Browne is the CEO of the UWI Arthur Lok Jack Global School of Business
