By an OGJ correspondent
PORT OF SPAIN, July 30 -- The Trinidad and Tobago government has mandated that construction of a fourth LNG train at the Atlantic LNG complex on Trinidad begin by August and for negotiations for supply contracts to begin on Trains 5 and 6, according to that country's Prime Minister, Patrick Manning.
The government wants to make the Caribbean nation a world center for LNG supply. When Train 4 is constructed, it would raise Trinidad and Tobago's LNG production to 14 million tonnes/year; that would increase to more than 20 million tonnes/year should Trains 5 and 6 become a reality.
Manning made the announcement in Port of Spain while addressing a recent signing ceremony between Atlantic LNG Ltd. and Phoenix Park Gas Processors Ltd. (PPGPL) for an increased supply of natural gas liquids from Atlantic's plant to PPGPL.
The announcement was made a week after the commencement of negotiations for construction of the fourth LNG train and before consensus could be arrived at on how best to turn the Caribbean republic's burgeoning gas reserves—a potential, including undiscovered prospective reserves, estimated at an ultimate 100 tcf—into revenue for the 1.3 million people of the twin-island state.
It also comes before agreement could be reached on the recommendations contained in a blueprint for development of the natural gas sector prepared by Houston-based Gaffney Cline & Associates (OGJ, Mar. 11, 2002, p. 22). That plan came out in support of further LNG expansion and investments in gas-to-liquids projects as well as metals, but Gaffney Cline advised caution about future ammonia and methanol expansion.
Manning revealed that the front end engineering design work had priced the fourth train at $1.1 billion; it would produce 5 million tonnes/year, most of which would be exported to the US.
By 2003, Trinidad and Tobago is expected to be the single largest exporter of LNG to the US and the fifth largest producer of LNG in the world, increasing the country's importance as a safe, reliable supplier of energy to the US. At present 60% of Atlantic's 3 million tonnes/year is exported to the US via Brussels-based Tractebel SA's, Everett, Mass., LNG terminal.
"With all that has happened in the United States post-Sept. 11, we see Trinidad and Tobago emerging as a key partner in meeting the US energy security needs," Manning said.
Already Trinidad and Tobago's LNG is important to the New England states. Trinidadian LNG, together with Algerian LNG supplies arriving at Everett, helps account for 20% of New England gas supply, rising to as high as 40% during cold winter days.
The importance of Trinidad and Tobago's natural gas to the broader US gas market is expected to grow with the two-train expansion—involving Trains 2 and 3—currently under way. Train 2 is slated for start-up this year, Train 3, next year.
Trinidad and Tobago has also been responsible for the opening up of Puerto Rico's LNG market, with an earlier agreement with Cabot LNG LLC—later acquired by Tractebel from Cabot Corp.—deal to provide gas to the EcoElectrica power plant now owned by the power giant Mirant Corp.
In addition when Atlantic's Train 2 comes on stream, it will open another LNG market with BP PLC LNG exports to the Dominican Republic.
Concerns over gas plan
But while Trinidad and Tobago's Prime Minister is calling for further expansion into LNG the leader of the country's major oil and gas trade union, Errol McLeod, has demanded that government not increase LNG production unless there is consensus on how to use the country's natural gas reserves.
Labor and other elements in the country have pressed for gas utilization projects that are more labor-intensive than LNG, such as methanol, ammonia, or olefins plants, thus creating more jobs.
"The Manning administration must know that before it allows more of our precious gas reserves to be exported in the form of LNG, there must first be consensus on how we can best use our natural gas so that the maximum benefits could redound to the citizens of Trinidad and Tobago," McLeod told a fired-up rally of workers celebrating the 65th anniversary of the birth of the trade union movement in Trinidad.
But Manning scoffed at this: "We have been elected by the people to govern, and we cannot tell them that we did not get the work done because we did not have consensus. At the end of the day, we are concerned about maintaining Trinidad and Tobago's competitive advantage in LNG," said Manning.
Manning says his government has been following "those aspects of the gas master plan which we believe are correct. After, all the plan is subject to change, and, in any case in the area of LNG, it simply calls for further expansion but does not say how many trains there should be."
The prime minister said continued LNG expansion would result in increased gas, used which would ensure there was "a critical mass of ethane" that could form the basis of an ethylene complex.
PPGPL Pres. Eugene Tiah agreed with Manning, noting that at present ethane is not removed from the gas stream in Trinidad and Tobago, but that would change with an ethylene complex.
Tiah said, "One of the many enabling elements in our deal with Atlantic is that we will then be able to comingle ethane in to the liquids stream and send it to Phoenix Park. We will then be able to aggregate the ethane in the gas from all the trains and provide it to an ethylene facility."
Both Tiah and Trinidad and Tobago's Prime Minister agreed that such a complex would be the basis for a multitude of petrochemical facilities, which has the potential for being the first real employment-intensive downstream link with Trinidad and Tobago's primary gas sector.
Tiah said not only would employment be created in the new petrochemicals industry, but it would also lead to new jobs at Phoenix Park, as PPGPL installs ethane extraction facilities to accommodate the new NGL stream.
Manning says the revenue earned from the development of the gas industry will make a significant contribution to bringing to fruition his dream of making Trinidad and Tobago a developed country within the next 2 decades.