Trinidad and Tobago's gas focus

When world petroleum prices slumped early this year, it created difficulties for many oil producing countries heavily dependent on crude oil exports. But the Caribbean nation of Trinidad and Tobago was hurt little because it has aggressively worked to attract $3 billion in foreign investment to tap its vast natural gas resources and shift dependence from oil. Now the twin-island state is on the verge of becoming one of the world's leading exporters of liquefied natural gas, ammonia, and

June 1, 1998

3 min read

Patrick Crow
Washington, D.C.
[email protected]

When world petroleum prices slumped early this year, it created difficulties for many oil producing countries heavily dependent on crude oil exports.

But the Caribbean nation of Trinidad and Tobago was hurt little because it has aggressively worked to attract $3 billion in foreign investment to tap its vast natural gas resources and shift dependence from oil.

Now the twin-island state is on the verge of becoming one of the world's leading exporters of liquefied natural gas, ammonia, and methanol.

Energy Minister Finbar Gangar said oil will generate only 15% of the nation's revenues this year. Production is about 125,000 b/d, down from 228,000 b/d in 1978.

He said Trinidad-Tobago has moved from licensing and royalty arrangements in oil and gas exploration to production-sharing contracts.

"It is really a type of risk-sharing arrangement where the government and the operator agree that we will share the profits arising out of oil and gas exploration after cost recovery. We feel that is the fairest arrangement for everybody. Contracts are mostly 25 years," he said.

LNG exports

Gangar said, "While we have not been finding much oil, we have been finding vast quantities of natural gas."

The government's push to develop those reserves, along with cheap electricity, has attracted many foreign companies.

Construction of the Atlantic LNG Co. liquefaction plant at Point Fortin, southern Trinidad, is more than 50% complete and on target for start-up in early 1999 (OGJ, Oct. 20, 1997, p. 52).

Owners of the 3 million metric ton/year project are Amoco Trinidad (LNG) BV 34%, British Gas Trinidad LNG Ltd. 26%, Repsol International Finance BV 20%, Cabot Trinidad Ltd. 10%, and National Gas Co. of Trinidad and Tobago 10%.

First shipments are due in the second quarter of 1999, with Cabot taking 60% of the LNG for sale in Puerto Rico and the Eastern U.S., and Enagas SA taking the rest for sale in Spain.

Gangar said the government has begun talks with the partners for a second train.

The venture gives Trinidad and Tobago a head start over neighboring Venezuela, whose $5 billion Cristobal Colon LNG project is on hold.

Venezuela cooperation

Gangar said Trinidad and Tobago wants to work with Venezuela on developing a gas field the latter has found off southeast Trinidad.

"I think both Venezuela and Trinidad recognize that certain benefits could be derived from handling that gas in Trinidad."

He said the two nations are discussing joint use of the Point-a-Pierre refinery "and the possibility of some kind of cooperation with respect to the retail marketing of petroleum products."

The 160,000 b/d refinery is designed to process 20-30° gravity crude but is only running 70,000 b/d of local production.

Gangar said last year Petroleos de Venezuela SA agreed to store its Pedernales crude at a terminal in Point Fortin, southeastern Trinidad, for shipment on to foreign export markets.

He stressed Trinidad and Tobago would "welcome private Venezuelan investments, and that is why we pay so much attention to Venezuela."