Trinidad and Tobago's plan to use its energy sector as a vehicle for outside investments to build its economy from the grassroots level depends on sustainable development of its natural gas resources, said the official in charge of such planning at the state owned natural gas company.
The two-island Caribbean country plans to more than double natural gas production to 3.8 bcfd over the next 4 years, said Gregory McGuire, manager of strategic planning for National Gas Co. of Trinidad & Tobago Ltd. (NGC), during a recent visit to Houston.
In a meeting with representatives of virtually all aspects of the gas industry, McGuire and Eric A. Williams, Trinidad and Tobago's minister of energy and energy industries, declared there has been "no better opportunity" for outside investors to participate in that country's push to develop its energy sector.
'Major player' goal
The "corporate vision" of NGC-and by inference, of the country's government-is to establish Trinidad and Tobago as "a major player" in the global natural gas business. Its energy sector previously was dominated by oil, but since 1999 it has produced more gas than oil.
Last year, it produced 1.4 bscfd of gas, with the largest portion, 46%, going into its petrochemical industry and 29% exported as liquefied natural gas (see related story, p. 20).
Trinidad and Tobago is the No. 1 exporter of LNG to North America, accounting for 43% of the 6.2 billion cu m of LNG imported into North America in 2000, McGuire said (see related story, p. 20). Other major US sources for LNG included Qatar 21%, Algeria 20%, Nigeria 9%, Australia 4%, and Oman 3%.
NGC's natural gas supplies come primarily from three offshore producers: BP PLC's Trinidadian subsidiary 56%; EOG Resources Inc., Houston, 13%; and a partnership of BG Group PLC and Texaco Inc., 23%. A portion of the gas supplied, 8%, comes from NGC's compression operations in Teak and Poui offshore fields.
The national gas firm has used both production-sharing agreements and license arrangements for foreign investors in its upstream gas exploration and development. "Most of (the deals with foreign E&D investors) recently have been through production-sharing agreements," said McGuire.
NGC's proven gas reserves escalated from 8.2 tcf in 1993 to 10 tcf in 1995 and 20 tcf in 2001, he said. Its estimated probable and possible gas reserves jumped from 4.2 tcf in 1993 to 9 tcf in 1995 to 13 tcf in 2001. The company's exploration potential was estimated at 60 tcf last year, McGuire said, up from 5-8 tcf in 1995 and a negligible amount 2 years earlier.
NGC officials said the country must prove an additional 39 tcf to support an acceptable reserves-to-production ratio to sustain demand scenarios to 2020 (OGJ, Apr. 1, 2002, p. 22).
Demand-driven
"Exploration efforts and gas reserves are driven by demand growth. With growing demand worldwide for natural gas, the demand is there," said McGuire. "You may have to wait a year or 2, but you're pretty much assured that, if you find gas, there is a reasonable chance that it will be brought to market in pretty good time."
Government plans for the country's economy is based on getting the most value added from downstream processes such as ethylene and other olefins, gas-to-liquids, and aluminum, as well as in continued involvement in methanol, ammonia, and iron and steel.
McGuire cited a number of new industrial projects under way, including two major methanol plants that are due to commence construction within the next 6 months. "We're also considering another ammonia project. We are geared to maintain our position as the No. 1 exporter (of ammonia), even as we go out the next 5-10 years," McGuire said.
Other segments of Trinidad and Tobago's gas utilization include power generation 13%, metal industries 6%, gas processing 2%, and refining 2%. A final 2% goes into a miscellaneous category classified as "other."
During 1995-2001, more than $6 billion was invested in the growth and diversification of Trinidad and Tobago's natural gas industry, the highest level of foreign direct investment, on a per capita basis, in the Americas, said McGuire. What has become known as the "Trinidad model" for development of a diversified gas market is being emulated from western Australia to Mozambique, he said.
NGC in 2001 reported total assets valued at more than $4 billion, including 624 km of installed natural gas pipeline infrastructure, with a capacity of 1.4 bscfd, currently transporting 1.1 bscfd; two platform facilities, located off the southeastern coast of Trinidad, for compression of low-pressure gas; industrial parks at La Brea and Point Lisas; and both port and marine facilities at Point Lisas and Brighton in central and southern Trinidad, respectively. It also is engaged in gas marketing and heads the government's program for promoting Trinidad and Tobago as a competitive location for gas-based investment.
"I'm a gas man in the new age," McGuire said. "There is no other entity in the world that does what NGC does, although some institutions may do some of it."
Diverse activities
NGC subsidiary National Energy Corp. of Trinidad & Tobago Ltd. (NEC) owns the harbor and specialized port and marine facilities at Port Point Lisas and manages these facilities as well as the Port of Brighton. NEC provides the marine and industrial infrastructure required by new gas-based industries locating into the country.
NGC has 84% of the equity shares of La Brea Industrial Development Co. Ltd. and manages that entity, formed in 1994 to oversee development and operation of the La Brea Industrial Estate and attendant port and marine facilities at the Port of Brighton. Petroleum Co. of Trinidad & Tobago Ltd., Trinidad and Tobago's state-owned oil company, holds the remaining 16%.
NGC NGL Co. Ltd. is another subsidiary, formed as the holder of NGC's 51% interest in Phoenix Park Gas Processors Ltd., the country's sole cryogenic natural gas processing facility, at the Port of Savonetta. The plant, one of the largest natural gas processing facilities in the Western Hemisphere, is jointly owned by NGC and two Houston-based partners: Conoco Inc., with 39% interest, and Pan West Engineers & Constructors, 10%. Commissioned in 1991, the plant was expanded in 1999 and now has a processing capacity of 1.35 bcfd and an outlet capacity of 33,500 b/d of natural gas liquids.
NGC Trinidad & Tobago LNG Ltd. was formed in 1995 to manage NGC's 10% equity interest in Atlantic LNG Ltd.. NGC Iron Co. Ltd. is NGC's most recent subsidiary, formed in October 2001 to acquire all shares of Trinidad Iron Carbide Inc., formerly Nucor Iron Carbide Inc.
NGC also holds an 18% share in National Helicopter Services Ltd., which provides helicopter transportation services to and from offshore installations.
In 1989, NGC took a 20% shareholding in Trintomar, a locally owned offshore gas-producing company operating Pelican field. That investment represented a diversification of NGC's supplies of natural gas. Trintomar currently is not operating production, but there are plans to reactivate the company.