Home' Trinidad and Tobago Guardian : March 9th 2017 Contents BG8 | ENERGY
BUSINESS GUARDIAN guardian.co.tt MARCH 9 • 2017
Finding solutions in future
From Page 4To put this in context, that is roughly the total
production of the world's third largest meth-
The company has complained that even af-
ter exhaustive negotiations with the NGC to
supply enough gas to operate its five methanol
plants and exploring possible alternative supply options, it
has no choice but to shut down the two plants.
According to MHTL, the gas required to run the two plants
at full rates is about 108,000 mmBtu/d. It has since offered
voluntary separation packages to 100 workers.
Sources close to the negotiations told the Business Guardian
that there are a number of issues plaguing the negotiations
including the inability of the NGC and MHTL to settle on a
price with the NGC demanding a price per mmbtu that is 50
per cent higher than MHTL is prepared to pay.
In addition, the NGC has said that MHTL has been operating
without gas contracts for three of its plants with one expired
since 2013 and two in 2015. The NGC has in the circumstances
been offering gas to those plants without a contract only af-
ter it has supplied its other contracted customers, including
MHTL's main competitor Methanex.
MHTL has, however, left the door open to possibly restarting
the plant but, according to the company, only if "a commer-
cially viable agreement is reached with NGC."
But this is not the whole story.
The problems faced today can be thrown back in part on the
catastrophic failure of the former PNM government and its
then Minister of Energy Conrad Enill who, between 2007 and
2010, headed the ministry and who attempted to negotiate an
increase in the government's tax take from the energy sector.
This action, would have made T&T's natural gas sector un-
competitive due to its tough fiscal terms and had a chilling
impact on investment in T&T's upstream gas sector.
The Patrick Manning-led administration's attempt to extract
more rent from the country's depleting natural gas resources
had a cascading effect with a failed bid round and virtually an
end to exploration for almost five years.
No investment in new exploration means no new gas.
For T&T, that has meant declining reserves and declining
production, which has resulted in today's gas curtailment woes.
In addition, the UNC came into power and spend four years
pretending that the problem would go away and claiming it
was a simple matter of bpTT doing maintenance work which
was leading to the shortfall.
In a report in the Business Guardian on March 8, 2012, former
Energy Minister Kevin Ramnarine either misdiagnosed the
problem or was just simply uninformed about the cause for
the gas shortage and the extent of the problem when he put the
blame for the reduced production squarely on the shoulders
of bpTT who, he said, was the "main driver of the shortfall"
owing to its ongoing maintenance work.
Ramnarine said bpTT's maintenance work was driven by
the fatal accident in the Gulf of Mexico, in which the Macondo
blow out led to a global safety programme in which the BP
Group is seeking to prevent any similar accident happening
in its operating areas.
This line continued until the end of 2014 when, in a Busi-
ness Guardian interview, bpTT's regional President Norman
Christie denied that BP was solely to blame for the declining
gas production and the gas curtailments.
Further, little has been said of the spectacular failure of BG,
now Shell, in its Starfish project and the reality that a big part
of the problem has been Shell's failure to produce the gas they
According to figures from the Ministry of Energy BG's natural
gas production averaged 695mmscf/d. This is down from 1.2
billion in 2010. That is 500mmscf/d less at a time when overall
production averaged 3.327 bcf/d or about 900mmscf/d short.
Sources at the NGC point out that they are taking a portfolio
approach by working with all the players to try and find gas for
2019 and beyond and to also increase production. The strategy
includes gas from Venezuela, more gas from BPTT with the
Angelin field, gas from BHP deep water, Starfish resuscitation
in 2018 and more exploration.
The strategy will require the country getting it right in its
negotiations with the energy giants and, to a certain extent,
So, even if prices go higher in the next two to three years,
the country is unlikely to reap the reward because of low pro-
Further, MHTL may have pulled the plug on two of its plants
but the headache will continue, especially with the coming on
stream of the Mitsubishi/Neal and Massy plant in 2019, which
will add gas demand to a situation of a deficit.
PHOTO: KRISTIAN DE SILVA
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