Home' Trinidad and Tobago Guardian : May 15th 2014 Contents article on May 5, in which Methanex
Trinidad's production shortfall was cited. In
an effort to provide "additional context" to
the recent fall in Methanex's local production,
NGC disclosed that "both Titan and Atlas
methanol plants experienced significant
unplanned shutdowns during the period which
impacted its overall production and reduced
the volume of gas requested from NGC." The
100 per cent state-owned company noted that
"events such as planned and unplanned shut-
downs of methanol plants are out of the control
Industry sources said the ebbs and flows in
the supply were negatively impacting the
equipment and causing more maintenance
work than normal.
Ramnarine agreed there was a very tight
relationship between supply and demand to
the point where if one of the upstream com-
panies has production issue, it leads to a short-
age gas for the downstream sector.
He said more gas has to be brought on,
pointing to the country's largest producer
bpTT as the only one with the capacity to
increase its gas production.
BpTT admitted it has had supply interrup-
tion in the first quarter which negatively
impacted supply to the Point Lisas estate.
In an e-mail response to questions, bpTT
said: "Although the period of intensified main-
tenance activity has ended, in line with regular
business activity, there are, from time to time,
normal operating activities that may have
short-term impact on production such as rig
moves, heavy lifts or delays on the drilling
programme. We strive, as far as possible, to
work with all stakeholders, including the Gov-
ernment, and downstream, to co-ordinate
these activities to mitigate impact on their
BpTT said in the first quarter of 2014, it
completed drilling on the Savonette 6 well
and also took the Savonette platform offline
to facilitate heavy lifting required for the start
of drilling of the Savonette 7 well. The platform
was brought back on production once drilling
started. It added this was a necessary outage
to continue to progress its drilling programme
and bring gas online. "This period of outage
would have had an impact on gas supply,"
Energy Chamber advocates gas cushion
The Energy Chamber, which represents com-
panies in both the upstream and downstream
sectors, noted that during the period 2011, 2012
and 2013, there were significant gas curtailments
in T&T related to important asset integrity
work by upstream gas producers and, to a lesser
degree, rig movements associated with the tie-
in of new gas supplies.
It said currently supply and demand are
tightly matched. However, to the best of its
knowledge, there is no substantial asset integrity
work planned for 2014. Although there is a
planned tie-in of a new field, Starfish, and
there will be other normal operational activities,
such as rig moves that may impact on gas sup-
ply.Therefore, it expects 2014 to be better than
the last three years from a gas curtailment per-
spective for downstream petrochemical pro-
ducers and Atlantic.
It said: "With supply and demand being so
tightly matched, any unplanned upstream
downtime or any delays in drilling programmes
and projects can have curtailment impacts.
This has occurred on a number of occasions
over the past few months. Any gas curtailment
has a very negative impact on the petrochemical
producers and on Atlantic, and curtailments
significantly impact on their profits.
"The very tight supply and demand situation
means it is very important that T&T develops
either gas storage capabilities or builds spare
capacity in our gas supply system. With a
cushion in place, the interruptions in gas pro-
duction that are the inevitably part of the nor-
mal operations of the gas value chain will not
have the negative impacts currently being felt."
The Energy Minister insisted things were
already getting better and this quarter is proving
to be an improvement than the first. "We are
now at the end of the second month in the
second quarter of the year. Supply is pretty
good and there has been little or no curtailment
on the estate. At this time, the estate is taking
about 1.72 billion cubic feet of gas per day, so
that issue was related to plan and unplanned
outages of the methanol plants and curtailments
in the first month of the first quarter."
But with the National Gas Company having
signed supply agreements for additional capac-
ity that will create additional demand, the
Business Guardian asked the Energy Chamber
if this was a wise move.
"With respect to new gas supply contracts,
it is important to understand the timing of
additional demand and the ability of upstream
operators to supply gas. A new plant beginning
construction in 2014 will not demand gas
until probably 2017. The current record high-
levels of investment into the T&T upstream
gas production sector are being made in order
to supply gas to meet future demands.
"All stakeholders, including the Ministry
of Energy, NGC, upstream companies and
downstream companies meet to discuss cur-
tailment issues and arrive at appropriate solu-
tions. T&T had good experiences with col-
laboration across the gas value chain to address
planned curtailments in both 2012 and 2013.
This practice is continuing in 2014."
Would Methanex buy MHTL?
In the April 30, analysts conference call,
Methanex president John Floren was asked
by Jacob Bout of CIBC World Markets for his
opinion on buying existing methanol assets.
If the MTHL assets, which are 56.53 per
cent owned by Clico, were to come up for
sale, how would Methanex look at that, Bout
"I think we like to grow our Company Jacob
and one of the ways to grow it is to buy existing
assets: first of all, it has to be up for sale, and
there is not a lot of people that are looking
to sell their assets today.
Second of all, wherever we look to buy
assets, we'd have to think a concentration
risk. So if you think of MHTL, we already are
pretty exposed in Trinidad, so we have to take
that into consideration. But if found assets
for sale that met our criteria of returns and
we could get comfortable with the associated
country risk then, yes, we would be buyers."
The fate of MHTL is being decided by an
arbitration tribunal sitting in London. The
arbitration tribunal ruled, in March 2013, that
the oppression claims made by MHTL's
minority shareholders were legitimate and
decided, in November 2013, that the relief
and remedy for this oppression was the sale
of Clico's stake in MHTL.
The arbitrators are, at this time, setting the
price for the sale of the MHTL assets based
on updated market valuations as at January
31, 2014, and following submissions by both
MAY 2014 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
Energy Chamber: Q2 better
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