Home' Trinidad and Tobago Guardian : January 26th 2017 Contents JANUARY 26 • 2017 guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
'Real' gas outlook for 2017
There is much speculative
reporting of our gas supply
situation which underlies the
economy of T&T. Reports and
government press releases of-
ten give the impression that
our gas supplies are adequate or are becoming
adequate, and that the government is working
diligently to solve any supply problems we have
or may encounter.
I think the truth is somewhat removed from
any such impressions deliberately or inadvert-
According to information provided by the
Ministry of Energy monthly bulletin, gas pro-
duction averaged 3.83 billion cubic ft per day
(bcfd) in 2015 and declined to 3.34 bcfd in 2016
up to the latest data from October 2016.
In this period the demand, mainly from our
petrochemical manufacturing facilities in Pt
Lisas and LNG, was some 4.4 bcfd or higher.
It is not as though this shortfall was tempo-
rary or caused by some incidents or unusual
maintenance activity in the offshore fields,
because the shortage has existed and steadily
worsened for the last four years and the decline
Already we are at least 25 per cent to 30 per
cent short in deliveries and at a time when
prices are low with no prospect of recovery,
and foreign currency shortage has become the
Extrapolating this decline suggests existing
gas production will be below 3.0 bcfd by end
2017. The Ryder Scott reports apparently in-
dicate that we have about "eight years" of gas
production left at current rates. This does not
mean we are OK for eight years! We are 25 per
cent to 30 per cent short on supply already.
The current producing gas reserves are in
reservoirs that are all in decline so they pro-
duce at ever diminishing rates. This means
we have many more years of gas production
but at lower and lower rates, so that Pt Lisas
facilities must start closing down, and with
them our economy.
We are told that some remedies are in the
planning pipeline. I am aware of the following:
1.Onshore compression. This consists
of compressors installed at Pt Fortin that
will lower the line pressure and thus allow
offshore wells to produce 300 million cubic
feet per day (mmcfd) more. Such compression
would be far more effective if installed off-
shore, but would be more costly, more difficult
to maintain etc. Start-up date April 2017.
2.Sercan. This is a joint EOG/BP project
to put a new gas field on production
which will provide an additional 200 mmcfd.
Start-up date May 2017.
3.Juniper platform currently being
installed and will receive production
from two subsea fields located in relatively
deep water. New gas rate 550 million cubic feet
per day (mmcfd). Start-up November 2017?
4.A supply from Venezuela's Dragon
field. This requires negotiations with
the Madura government and its hostile par-
Possible volume 150 mmcfd but no time-
frame for such unpredictable negotiations.
Venezuela historically has been fundamentally
opposed to exporting gas and very nationalistic
about in its oil policies. It should also be noted
that such Venezuelan gas cannot be compared
in value with T&T gas, since the sales price,
royalties and tax belong to Venezuela leaving
value to T&T mainly in petrochemical plant
profit and job preservation.
5.A supply from the Loran/Manatee
cross border field under a unitisation
agreement with Venezuela.
Negotiation difficulties as above and to date
this agreement seems to be quite impossible.
Slightly more valuable to T&T since volumes
will be greater and 25 per cent of sales price, tax
and royalty belong to us. However if it weren't
for the Venezuelan negotiations problem this
could be a relatively quick (four years) remedy?
No time scale assumed.
6.Angelin. A potential bpTT project
which will tap a known gas reservoir.
Possible start-up date 2023. However, bpTT is
angling for improved terms from NGC and/or
government before they start even the design
of this project and there is virtually no more
room to improve the terms and still remain
internationally comparable, short of simply
giving BP a tax holiday. And what good would
that be for T&T?
Let's assume the date for start up is 2021
and thus not even worthy of consideration as
a solution to the immediate problem.
Adding up the possible increments from
these future supplies (numbers 1 to 3) indicate
that we may have an additional 1.05 bcfd by
the end of the year.
However, the existing wells will have de-
clined by a further 430 mmcfd, and to calculate
any shortage we must recognise the current
1.06 bcfd shortfall in production so that the net
change will be 1.05 -- 1.06 - .430 = - 0.44 bcfd.
Thus after three (successful) projects in
2017, we will be still 440 mmcfd below the
amount required by our petrochemical and
Remember schemes like Onshore Compres-
sion simply suck more gas from the same res-
ervoirs and accelerate the decline, so we can
expect matters to get worse more rapidly than
the present rate.
I would, therefore, like to ask on what ba-
sis was the US$ 1.0 billion Mitsubishi/Neal &
Massey/NGC methanol/DME plant approved?
With a start up in 2019, this plant would require
another 100 mmcfd from our ever diminishing
and already inadequate supplies.
It certainly appears that both the UNC and
PNM---who allowed this---together with Neal &
Massey and Mitsubishi, are all keeping some-
thing secret and misleading us the citizenry,
plus shareholders of the Pt Lisas plants. Is this
a massive private enterprise white elephant
or some conspiracy to shut down some of the
present users of gas?
Nobody in their right mind would field a
$42 billion budget with these figures and the
knowledge that gas, oil, LNG, methanol and
ammonia prices have all declined. I doubt we
can reasonably afford a $30 billion budget now.
Clearly someone owes us an explanation.
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