Home' Trinidad and Tobago Guardian : August 21st 2014 Contents BG26 | COMMENTARY
BUSINESS GUARDIAN www.guardian.co.tt AUGUST 2014 • WEEK THREE
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August 31, 2014.
Probably the most significant news
item of the last few years for the medi-
um-term economic outlook of T&T
was made last week by bpTT. Even
with the follow-up press release from
the Minister of Energy, the announce-
ment only received limited news col-
umn inches and no discussion or analysis from com-
Despite the lack of media interest the announcement
that BP has finally fully sanctioned the Juniper devel-
opment project is a huge significance to our future
Juniper is a very big development: the production
capacity of the facility will be approximately 590
million standard cubic feet a day (mmscfd) or about
14 per cent of the current national production. This
is a world scale development representing an invest-
ment of more than US$2 billion, according to the
Minister of Energy and Energy Affairs.
The Juniper facility is crucial to T&T s ability to
continue to supply natural gas to both the domestic
market (primarily the petrochemical facilities in Point
Lisas) and to international markets, via LNG
exports. The development needs to be understood
within the context of the widely-reported gas supply
issues that have had negative impacts on both the
petrochemical and the LNG industries over the past
These supply problems have in turn directly affected
T&T s gross domestic product (GDP) growth rates,
a key indicator that analysts use to determine the
health of the economy.
Any constraints to gas supply flow directly through
to lower or negative GDP growth, even if the rest of
the economy is doing well.
The Minister of Energy s press release linked the
sanctioning of the Juniper project with the introduction
of significant fiscal reforms over the past few years.
The Energy Chamber of T&T has played a crucial
role in bringing about these successive reforms to
the country s fiscal regime. We have consistently
argued over many years that the introduction of a
more competitive fiscal regime was necessary to
stimulate much-needed new investment in the
upstream energy sector.
During our discussions on these issues one of the
questions that we frequently got from Ministry of
Energy and Ministry of Finance officials was "would
the investments come if the taxation reforms were
One of the understandable fears of the Government
officials has been that companies would just use the
lower tax takes to simply take more profit and not
reinvest. The evidence of the past few years, with
the very significant upswing in drilling and related
activity in the upstream energy sector, has shown
that these fears, while understandable, were unfound-
ed.The industry has clearly responded to the fiscal
reform measures by increasing investment. This is
good news for the future of our industry.
Southwest peninsula to benefit
from fabrication opportunity?
T&T has reached the helm in engineering,
procuring and constructing several top proj-
ects all built, commissioned, operated and
at times designed by a local labour force.
From platform fabrication, drilling to petro-
chemical plant construction and plant oper-
ations, the country has been able to deliver
world-scale projects on time, under budget
and with consistent, high degrees of health
and safety performance.
The Government sees the Juniper devel-
opment as a potential fillip to the local plat-
form fabrication industry, helping resuscitate
a sector that has been severely affected by
the downturn in upstream investment in
the 2008-2012 period.
The southwest peninsula has one of the
country s highest unemployment rates and
given Government s plans for making the
Union Industrial Estate a "new Point Lisas"
the time is ripe for a new fabrication project.
As a designated growth pole, the south-
west peninsula needs to have as much eco-
nomic opportunities as possible. The value
added component to any potential project
will likely help stimulate the business
prospects for small businesses---from welding
companies to appliance stores to bars to
A decade ago, in 2005, the TOFCO fab-
rication yard at La Brea was a busy place
with several offshore platforms being con-
structed. The EOG Resources Oilbird plat-
form was the first offshore processing facility
designed in the country, with 74 per cent
of the labour hailing from these shores.
The Oilbird could handle up to nine wells
plus the three phase separation of around
300 million cubic feet of gas and associated
fuels. It was completed one and a half
months ahead of schedule.
Massy Wood Group supervised the design
and engineering of the platform. Local com-
panies such as OPE Trinidad Ltd and
Insertech were also responsible for offshore
pipeline engineering and electrical systems.
In the past, bpTT have had similar suc-
cesses in platform fabrication. Four bpTT
platforms have been constructed locally:
Cannonball, Mango, Cashima and Savonette.
For Mango and Cashima, bpTT saved $11
million in all on the design and fabrication
phases, but the statistic that jumps out is
that T&T nationals were responsible for 65
per cent of the project management hours
and received around 25 per cent of the total
engineering, procurement and construction.
The two projects cost just over US$800
The Savonette platform cost US$675 mil-
lion and features the largest jacket ever con-
structed in T&T. BG T&T has also used
local expertise for fabricating its Poinsettia
Given these examples, a strategic drive
to build capacity in platform fabrication and
spin-off services such as ship repair and
maintenance has value for the country.
The Energy Chamber s vision is for T&T
to be energy services hub of the region and,
if we tap into the potential of Juniper, the
project can help us develop our industry
sustainably for years to come.
Juniper boosts energy sector outlook
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