Last week’s article concluded that the natural gas economy is in uncertain territory and structurally weak. Uncertain territory because the natural gas supply will not be sufficient to bring all the Point Lisas plants up to full capacity utilisation. Further, that increased natural gas feedstock prices to the petrochemical plants would translate into operating losses. Articles in the Business Guardian made this point. In these circumstances, any “stability” in the Trinidad and Tobago economy is temporary as natural gas remains the dominant factor in T&T’s economic performance. The economy’s performance depends on the success of current exploration activities and on T&T’s relationship with Venezuela.
A substantial share of installed capacity has been either idled, intermittently curtailed, or operating below nameplate capacity. To put this in context, T&T has approximately 11 ammonia plants in Point Lisas and 10 Methanol plants.
Currently, at least six major petrochemical plants at Point Lisas are shut or idled due to natural gas curtailment. These include three of Proman’s five methanol plants, the larger of Methanex’s two methanol plants (the other is offline for maintenance), one Yara ammonia plant, and Nutrien’s nitrogen complex. The Nutrien complex, with four ammonia and one urea plant, began controlled shutdowns in late 2025. Only CCGL’s methanol plant in La Brea, a joint venture between Mitsubishi, Massy, and NGC, is fully operational. As a result, 54% of all ammonia plants are idled.
The core issue is declining domestic gas supply. This has reduced feedstock for ammonia and methanol producers. Recent disputes over port charges and gas pricing worsened matters. Also, higher gas prices for local industrial customers (LICs) have squeezed these midstream customers. They use only 1% of the gas but make a significant impact on unemployment numbers.
The National Gas Company sits at the heart of the country’s energy sector as an aggregator, or middleman, an intermediary responsible for managing the flow of gas to different market segments. It buys gas from upstreamers under contract and sells to downstreamers under contract. The difficulty with this arrangement is that the contracts do not align in duration or volume, leading to tense negotiations with downstream petrochemical companies.
The plan acknowledged the current situation: declining gas reserves, downstream gas shortages, concerns about LNG pricing and transfer pricing, fiscal leakages, and the future structure of the gas industry. It strongly emphasised the need to accelerate offshore exploration, improve upstream incentives, and encourage new reserve replacement. The key drawback is that upstreamers have the upper hand, as they control gas supply and the investment resources needed to explore for and bring new gas to market. This explains the focus on the Manatee field and the efforts to acquire a licence for Venezuela’s Dragon field.
Recognising recurring gas shortages, the plan recommended allocating natural gas in line with national priorities. This gave NGC a key role. The plan suggested protecting electricity generation, strategic industries, and major employers (like the LIC segment). It also proposed that any curtailment system be transparent, rules-based, and predictable, so downstreamers could plan shutdowns and maintenance. The plan further noted that petrochemical plants contributed more financially and economically than ALNG.
Unfortunately, the upstreamers (Shell, BP, EOG) have the upper hand, as they control gas supply. Recent statements by NGC’s Chairman suggest a decision to promote the interests of the upstreamers (Shell, BP, EOG) and LNG at the expense of the petrochemical sector. Whilst there may be a short-term situation in which realised net back prices (the net realised price on shipments net of regassification, transport and marketing costs) may favour LNG, the long-term picture indicates that the longer-term contribution of the petrochemical plants is greater.
Starving petrochemicals of feedstock is not in T&T’s long-term interest. Neither NGC nor T&T truly has the upper hand. Proman’s announcement of expansion in Oman shows that its investment priorities lie elsewhere. In 2012-13, Methanex dismantled and relocated two methanol plants from Cabo Negro, Chile, to Geismar, Louisiana, because of lower gas prices. Similarly, Nutrien’s parent company’s recent earnings were unaffected by the closure of its T&T operations.
Nor should BP and Shell’s negotiation with Venezuela be misinterpreted. They are pursuing their corporate interests, not T&T’s national interest. While they may direct enough of any additional gas they may secure to make use of ALGN’s spare capacity in T&T, Venezuela has multiple idle or partially idled ammonia and methanol plants, primarily located within the José Antonio Anzoátegui Petrochemical Complex. The gas need not be directed to T&T. Further, there is the option of setting up shop in Guyana, which has abundant gas supplies.
It would be a mistake to think that T&T holds the upper hand in the current environment. Financial decisions are made at the margin. NGC lacks both the capital and the infrastructure for gas exploration. Capital flows instinctively toward environments where it is most valued, respected, and yields the highest returns. It is important that NGC gets its relationships with stakeholders right in both upstream and downstream sectors. The energy sector is critical to T&T’s economic fortunes for the foreseeable future. Assuming either NGC or T&T has all the cards would be a catastrophic strategic error.
Mariano Browne is the Chief Executive Officer of the Arthur Lok Jack Global School of Business.
