Home' Trinidad and Tobago Guardian : August 15th 2013 Contents AUGUST 2013 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
Energy Minister Kevin Ramnarine is pre-
dicting that the gas shortage which
plagued the Point Lisas Industrial Estate
for more than three years will end in
He told the Business Guardian the Ministry of Energy
and Energy Affairs had forecast that come 2014 natural
gas production and usage will return to levels that
occurred prior to the 2010 curtailment.
"Since May 2010, we have had a situation at Point
Lisas and, to a certain extent, at Atlantic LNG where
we have had a shortfall in natural gas. It varies from
time to time, but a rough guesstimate is that ten per
cent and that is significantly because of maintenance
over the last three years."
Ramnarine said companies on the Point Lisas estate
had asked the Ministry of Energy for a forecast of the
natural gas production in 2014. He said Frank Look
Kin, former president of the National Gas Company
and now adviser to the minister, was asked to provide
a forecast and the ministry was comfortable that 2014
will see some relief for the petrochemical sector at the
Over the past three years, ammonia, methanol, urea
and LNG production have been down, leading to hun-
dreds of millions of dollars being lost to the treasury.
At the centre of the shortfall in the natural gas pro-
duction has been a major maintenance programme
being undertaken by the country s largest natural gas
producer bpTT and, in some cases, the second largest
producer BG T&T.
BpTT has publicly announced it is going to end its
major maintenance programme before 2014 when it
completes work on its ageing infrastructure and comes
in line with the company s global safety position that
was adopted post the Macondo disaster in the Gulf of
Mexico in which it is still involved in litigation with
the United States government.
Ramnarine said he did not want to give a blanket
assurance that the troubles over the last three years
were over, but was confident that requests for natural
gas coming from the estate will be met.
He said: "I don t want to make any specific prediction,
but from what it is looking like in 2014, most of the
maintenance will be behind us and we should return
to the pre-2010 status quo."
He pointed to bpTT being on Savonette Wells 4, 5
and 6 from its 2tcf field as well as EOG resources, free
wells from its Osprey Field, which he said will lead to
additional production coming online. Ramnarine cau-
tioned that bpTT will not have any cushion gas available
and should there be a disruption of supply, the NGC
will not be in a position to call on the company to
supply more gas.
In the circumstances, he said the ministry wants
NGC and bpTT to work out a commercial arrangement
that will see bpTT providing cover to the national grid.
Ramnarine said: "The ministry has spoken with the
NGC and bpTT about the cushion gas and one school
of thought being put forward to us is that there is a
need for a supplementary gas contract with bpTT that
will mimic the cushion gas and will be an economic
incentive to bpTT to maintain that cushion gas."
Ramnarine said the estate requires 1.85 billion cubic
feet a day of natural gas was now receiving 1.7 bcf/d
or a shortfall of 150 million cubic feet a day.
Finance Minister Larry Howai has promised that the 2014 budget
would be an expansionary one as the Government attempts to push
growth of the economy.
But economist Gregory McGuire has urged Howai not to go on a
spending spree as the Government prepares to face the electorate in
In a recent interview, Howai told the Business Guardian that the Gov-
ernment had seen growth in the economy and it was seeking to keep
the momentum going.
"We have a programme for ensuring growth in the economy and that
programme will continue and I see no reason why we would want to
deviate from what we started off doing during the course of last year,"
McGuire said it was very easy for the Government to show growth
in the economy, saying the Government could simply spend its way to
growth while at the same time not dealing with the structural challenges
of the economy.
"When the Government talks about growth and you hear, for example,
growth in the services sector and look closely at the numbers, you see
that they are talking about expansion of restaurants and food courts
and security firms. To me, these are all in the services sector, but they
are not adding to the productive capacity of the economy, They are
simply spending the money earned by the energy sector, which is in
The Finance Minister said the Government had inherited challenges,
including the Clico and Hindu Credit Union crises, and the first move
he made was to try and bring an end to them and return the economy
to growth. He said those issues are virtually settled and the time had
come to move onto the next stage.
"I have always said that growth does not necessarily mean development.
Development, in a sense, represents a much broader diversification of
the economy and a much greater degree of sustainability than we have
right now. So the next phase that I am looking for us to get into is a
greater focus on that part of the equation that related more to the devel-
opment of the economy further, diversification, getting new projects
up and running. So those are the areas we will be focusing on during
the course of the next year," Howai said.
McGuire said the Government had failed to expand the energy sector.
While he conceded there had been significant spending upstream, he
said this had not resulted in expansion of the vital sector.
"What you have is maintenance work taking place upstream. When
that money is spent, most of it goes to companies and manufacturers
abroad. In addition, despite all the public relations, not a single downstream
project has started since the Government has come to power. A lot of
people have been suggesting that the Mitsubishi/Neal and Massy project
was a done deal. If that is the case, then why has it not started? So
the reality is the key sector has not expanded," McGuire said in a telephone
interview on Tuesday.
McGuire said even so, the Finance Minister should continue to have
strong revenue streams coming out of the energy sector in 2014. He
predicted that ammonia prices will remain strong as will oil prices.
Howai said his revenues from the sector were very good in 2013 and
this had even led to a surplus after the first nine months of the 2012/2013
fiscal year. He said he expected the Government spending to remain
"We did have an expansionary approach in this year s budget. I am
gratified that we have seen 12 months of growth while, at the same
time, keeping our fiscal position controlled. Up to the end of June, we
were actually showing a surplus. It does not mean we will end the year
with a surplus. It will depend on how the rest of the last three months
turn out," Howai said.
McGuire said if the Government was spending the money on productive
capacity, then he would have no problem. He said the continued expansion
of social programmes like CEPEP will not help the economy and were
really doles. He said it simply led to more consumer spending and the
importation of goods.
The economist said even the government spending in construction
had to be questioned because contracts were going to companies like
Shanghai Construction Group, which import everything, incuding labour.
Gas shortage at
Pt Lisas to end in 2014
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