Home' Trinidad and Tobago Guardian : April 20th 2017 Contents BG4 | NEWS
BUSINESS GUARDIAN guardian.co.tt APRIL 20 • 2017
T&T bars DeNovo
gas sales to MHTL
The Government has taken
a policy decision that the
state-owned National Gas
Company should be the
aggregator of natural gas in
T&T, meaning NGC would
buy the gas output of upstream producers
and then sell that gas to the downstream
users on the Point Lisas Industrial Estate.
This was disclosed by Minister in the Of-
fice of the Prime Minister Stuart Young at a
news briefing at his office earlier this month.
Young disclosed that the decision on
NGC's status between producers and us-
ers of natural gas was taken even before
Cabinet officially approved the natural gas
"We have taken a decision that NGC
should remain as an aggregator because our
position is that ultimately all of this gas be-
longs to the citizens of T&T and not to any
single entity or group," said Young, making
the point that the Government is trying to
maximise the returns to the country by the
adoption of the policy.
NGC's role as aggregator means that no
company operating downstream can make
an arrangement to buy natural gas directly
from a producer of the commodity, such as
BP, Shell or BHP Billiton. That arrangement
would have to be with NGC.
Asked if it made financial sense for NGC
to maintain its role as aggregator in the con-
text of the gas producers demanding higher
prices and the gas users demanding lower
prices, Young said: "Yes. This Government's
position is yes. As you would appreciate there
are margins, so obviously you have the for-
mula of margins that can be used.
"But if we open up the market and al-
low upstream producers to sell directly to
downstream users, you would literally have
"The upstream producers are trying to
make arguments that the government would
continue to get revenue based on the taxation
at the wellhead and from the downstream
users by the sale of commodities.
"We have taken a policy decision that we
are not going to open up the market to just
allow new players in upstream to sell directly
"There are many different formulations
that you can have in between there, so we
are thinking outside of the box. There are
margins that can be reduced, but there are
other areas we are looking at that, if our con-
versations continue, will revolutionise the
way that upstream ends up in downstream
with NGC continuing as an aggregator."
Young said the only gas producers that do
not sell gas through NGC are Atlas Methanol,
which is partly owned by BP, and Atlantic
LNG---whose major shareholders are BP and
Shell, both of which sell directly to the liq-
uefaction facilities at Point Fortin.
Atlas Methanol is 63.1 per cent owned
by Canada's Methanex and 36.9 per cent
Proman, which owns MHTL, is also the
owner of DeNovo, which acquired two Gulf
of Paria blocks, 1(a) and 1(b), from Centrica
Given the difficulties that Proman has had
getting gas from NGC, it acquired the two
blocks in order to directly supply its metha-
nol, ammonia and petrochemical plants on
the Point Lisas industrial estate.
Questioned on why the government would
prevent DeNovo from supplying a dedicated
stream of gas directly to MHTL, given the
precedent of BP supplying directly to Atlas,
Young said: "That is a government policy,
for exactly the same reason I just outlined to
you. That we are not at this time prepared to
open it up to allow upstreamers to go directly
When it was pointed out that the prece-
dent of BP supplying directly to Atlas was
in place, Young said: "One out of how many
others. We are not prepared to open up the
gates and tell upstreamers go and negotiate
directly with downstreamers."
Questioned on whether the government's
policy to strictly enforce NGC's role as an
aggregator of natural gas was putting the
future of Point Lisas at risk, Young said:
"No because there are conversations and
negotiations taking place."
DeNovo has an 80 per cent working in-
terest in the blocks, with the Petroleum
Company of T&T (Petrotrin), owning the
other 20 per cent.
Cabinet confirmed NGC's status as the
natural gas aggregator despite the fact,
Young said, that the company had not been
able to meet its gas sales contracts with the
Point Lisas users since 2010.
He said that NGC had not been able to
satisfy the demand for gas from downstream
users "because of the upstream producers
failure to supply contracted quantities under
their gas sales contracts," to the NGC, for
which the established contracts of the up-
stream producers do not require them to pay
NGC any form of damages for this failure.
From Page 3That report, according to Mrs Sant's
unrefuted reporting, identified six
shortcomings of the Galicia includ-
ing that it "incurs many added costs
because of the berthing configuration
which is unsuitable."
These additional costs included: "There has been
a barge hired to use as the landing facility for the
stern ramp every time we have to use the Galicia"
The barge, he said, "comes at an additional daily cost
Captain McMillan recommended that the Galicia
be replaced by a more suitable vessel.
In that additional report, submitted in April 2016
(unfortunately no specific date was provided), Mc-
Millan identified six vessels to replace the Galicia:
• The MV Straitsman which was at the time trading
in New Zealand
• The MV Hammer Rodde, trading in Denmark
• The MV Levante, which was on Charter up to
December 2016 in the Mediterranean
• The MV Daltivia which he said “could be made
available for sale if the owners can find a replacement
• The MV Clipper Ranger, which is a freight only
vessel and which the owners "want to sell," providing
they agree to the "conditions of sale
• The MV Ocean Queen, which was described as
a car-truck carrier and which was "immediately
available for sale."
Of the six, McMillan recommended the MV Ham-
mer Rodde, which he said “was most likely to meet
the requirements of those instructing me."
So, here is an apparently well-respected profes-
sional providing advice and a short list of potential
vessels and indicating the one that he thought "was
most likely to meet the requirements of those in-
That recommendation was made in April 2016.
The questions are these:
• Were McMillan’s reports made available to Cab-
inet in its deliberations on the issue?
• If the reports were made available to Cabinet, why
did Cabinet not at least direct the Minister of Works
and Transport to explore the possibility of securing
the option recommended by McMillan or one of the
other possibilities that he identified?
If the reports were not made available to Cabinet,
the former chair of the Port Authority, Christine Sa-
hadeo, has some serious explaining to do, in terms
of why she commissioned reports with regard to the
inter-island cargo service, which were not shared
with the other directors of the board? And also why
didn't Cabinet have the benefit of expert reports on
the shortcoming of the Galicia and its possible re-
In conclusion, if Cabinet knew of Mr Christie's
warnings in March 2016 and Captain McMillan's re-
ports in April 2016 and still ignored these important
issues for more than eight months, then the only con-
clusion that a fair-minded observer---which I consider
myself to be---can come to is that the current Cabinet
may be dysfunctional or that it simply dropped two
large and consequential balls.
I personally would love to know the real explanation
for these missteps.
Is the current
did it simply drop
two large and
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