The Natural Gas Industry in Trinidad and Tobago Essay Sample
The natural gas industry in Trinidad and Tobago began with the find of gas on land at Mahaica in 1955 by Dominion Oil. nevertheless the first major natural gas find ( One Trillion Cubic Feet ( Tcf ) ) was off the East seashore of Trinidad by Amoco in 1968 in the Teak seaward field. This was followed up in 1973 by a 2 Tcf discovery in the South East Galeota land area.
There was nevertheless production and use of gas before this day of the month. Although the day of the months referred to tag the first big discoveries of natural gas ( i. e. & gt ; 0. 5 tcf ) . anterior to 1955. gas was utilized as fuel to power machines in the oilfields they were found associated with and was so known as casing caput gas. During the 1930s three soaking up and one surface assimilation works for the recovery of gasolene from natural gas began operation in the country1. During this period as good ( 1933 ) the first little graduated table experimentation on natural gas for secondary oil recovery began. which blossomed into the first big graduated table gas injection plan in the Forest Reserve field in 1945. But the general policy of the oil operators. so as it is now when an oil field is produced which has associated gas. was to minimise its production in order to keep force per unit area degrees in the reservoir to maximise primary recovery.
There was besides no usage for the extra gas beyond what could used in the field itself for fuel and gas lift and in any instance. the gas lift volumes were blown to the ambiance ( vented ) . By 1950. 40 % of Trinidad and Tobago’s 32. 3 bcf ( 88. 5 MMscf/d ) of natural gas produced in that twelvemonth was wasted in this manner. lifting to 61 % of 97. 7 bcf ( 267 MMscf/d ) in 19602. In that twelvemonth. the Petroleum Department had this to state about the sector: “The under use of our natural gas is a job that has long plagued both the oil industry and the economic system. In any associated gas economic system such as ours. a market must be for the gas or else it goes to blow. At present some 61 % of produced gas is flared despite the being of two big refineries a cement mill. power works petrochemical works all of which are gas consumers.
The Petroleum Division has been actively concerned with this job from a preservation point of view and several precautions have been instituted by the Industry to avoid waste. In add-on. many big graduated table injection undertakings are being studied and programs are now being drawn for the building of a gas grapevine from Penal to Port of Spain. If these several undertakings come to fruition. it will non be long before full use of Trinidad one-year gas production is assured” . As former Prime Minister. Patrick Manning. remarked to veteran energy journalist. David Renwick. “Unlike the evolutionary-type development of the petroleum oil and refinement sub-sectors. a deliberate policy attack was adopted by the province for the development of the natural gas sub-sector. ”
1959 was a momentous twelvemonth for the industry because the first fabrication works based on natural gas since the natural gasolene workss constructed in the 1930s ( which utilized less than 1 % of Trinidad’s entire production through most of the 1950s ) was commissioned. This was the Federation Chemicals Ammonia Plant ( Fedchem ) built. owned and operated by W R Grace. which by 1960 consumed 1. 4 % of Trinidad gas production. When by 1977. the Tringen Plant was added a stone’s throw off from the Fedchem site. the ownership form had changed compared to the inaugural Point Lisas installation. The Government owned 51 % of the works. owned the natural gas and the installations conveying it and had secured a more favorable natural gas monetary value of $ 1. 68 per thousand standard three-dimensional pess ( Mscf ) compared to the 27cents per Mscf that was negotiated in 1959 between W R Grace and a multinational company with small engagement by the authorities. 4 The Government’s attack was facilitated by the commissariats of bing Exploration and Production ( E & A ; P ) Licences which said that the Government of the Republic of Trinidad and Tobago ( GoRTT ) was entitled to a producer’s gas if he did non hold a usage for it as defined in the ordinances. The lone gimmick was that the GoRTT had to raise its ain substructure.
Enter the National Gas Company ( NGC ) . a 100 % state-owned company which was established in 1975 with sole rights to transport and sell natural gas to domestic consumers through an integrated grapevine system. By 1979. the major undertakings which put the NGC in ownership of a complete gas transmittal system from offshore Galeota to Port-of-Spain and Point Lisas capable of transporting in surplus of 400 million three-dimensional pess per twenty-four hours. were commissioned. The undertakings were treble – the offshore 24-inch diameter grapevine from the Teak/Poui compaction platforms ( which compressed associated gas from Amoco’s 1968 Teak oil and gas field ) to Galeota ; a 14 stat mi. 20-inch gas grapevine from Picton to Indicate Lisas and eventually a two mile subdivision of 24-inch pipline from Guayaguayare to Beachfield.
These. together with the lone major bing gas grapevines prior to 1977 ; the first. built in 1953 to provide the Penal power station and the 2nd built in 1956 to provide the FedChem works in Point Lisas ; would go the anchor that made possible the development of what Trinidad’s first premier curate hailed as “the symbol of the cardinal reorientation of the international economy” . Trinidad had now planted. at the really zenith of its oil economic system ( the country’s highest of all time oil production rate of 83. 7 million barrels of oil ( 230 000 bbl/d ) was achieved in 1978 ) . the seeds for the development of a new growing pole for the economic system.
By the late 1980’s the Federal Research Division of the United States Library of Congress in a Country Study on the Caribbean Islands had this to state about the twin island republic5: “Trinidad and Tobago possessed an industrial base that was unmatched in the Caribbean and for a state of about 1. 2 million people. possibly in the universe. As new heavy industries came on-stream in the early 1980s. Trinidad and Tobago was a manufacturer of oil. asphalt. natural gas. ammonium hydroxide and urea fertilisers. methyl alcohol and Fe and steel. Petrochemicals based on natural gas became the Centre of the industrial scheme envisioned in the 1970s to diversify off from oil and export agribusiness. ”
Since those judicious yearss. a meeting of factors enabled Trinidad and Tobago to keep its natural gas development impulse. non the least of all was the autumn in United States’ natural gas domestic production during the late 1990’s straight up to 2008. before the widespread development of shale gas. A big portion of the U. S. s’ domestic production of ammonium hydroxide was virtually transplanted from that state to make Trinidad’s eleven ammonia workss ( 5. 2 million metric metric tons per twelvemonth capacity ) . due to the volatile and upward tendency in natural gas monetary values which led to a 44 per centum diminution in production and a 115 per centum addition in imports of ammonium hydroxide in that state during the period 2000 – 20066. In a similar mode. the United States’ one-year methyl alcohol production capacity peaked in 1998. and so fell to less than 1 million metric tons. due to aging workss. MTBE phase-out and high natural gas prices7. easing the constitution of an anual production capacity of 6 million metric metric tons of methyl alcohol at Point Lisas. The inquiry which must now be asked is whether. as Trinidad’s older ammonium hydroxide and methyl alcohol workss come to the terminal of their gas contracts. the form be reversed ; intending that methyl alcohol and ammonium hydroxide workss could be constructed closer to the Centres of major production. particularly if natural gas monetary values continue to fall in the U. S.
Merely as 1977 marked a displacement in the ownership form of big natural gas based workss. so excessively did 2010 bode the beginning of a new type of petrochemical development. viz. the multi-product diversified petrochemical composite. This is best illustrated by the Methanol Holdings Trinidad Limited ( MHTL ) Ammonia. Urea Ammonium Nitrate and Melamine ( AUM ) US $ 1. 7 billion mega undertaking dwelling of seven plants8 which manufacture Urea Ammonium Nitrate ( UAN ) 32 % solution and Melamine utilizing feedstock from integrated urea and ammonia workss. Again. to corroborate Manning’s words. the undertaking was guided by a Government policy which did non allow future petrochemical undertakings that did non diversify the economic system off from ammonium hydroxide and methyl alcohol. two trade goods which the twin-island democracy was to a great extent invested in.
Mr. Rampersad Motilal. the Chief executive officer of MHTL had this to state about the hereafter of the gas industry “…… . netbacks from gas exports will stay low. In such a scenario. undertakings such as AUM. located within Trinidad and Tobago. which utilise little sums of gas [ 87mmscf/d ] but purchase important capital. extremely trained work force and provides chances for local concern activity must be a top precedence. ”
His optimism about local concern activity is based on the nature of one of the merchandises made by this works – cyanuramide – which is used to do amino-formaldehyde rosins which are processed and used in laminates. wood adhesives. paper and fabrics. kitchen and tableware. to call a few. This dynamic local company even partnered with the Ministry of Energy and Energy Affairs in November to host a conference targeted at promoting local makers to put in the usage of cyanuramide. In Mr. Motilal’s words ; “ the benefits to the local economic system of utilizing our limited natural gas resource for the industry of value-added downstream merchandises far outweigh any short-run benefits that may be derived from the export of our resources to external energy markets. ”
This leads us to the largest consumer of gas in the state. the Atlantic LNG ( ALNG ) company of Trinidad and Tobago. which is a joint venture company. consisting of the largest manufacturers of gas in the state. the NGC and a major seller of gas internationally. The day-to-day demand of the installation is 2. 4 Bcf. which is 60 per centum of Trinidad and Tobago’s mean production of 4 Bcf per twenty-four hours in 201010. Despite Mr. Motilal’s flippancy about the benefits of LNG export. the natural gas net incomes paid in revenue enhancements to the authorities. lend a big portion of the US $ 2. 9 Billion in energy grosss the GoRTT earned in 200911. But the start-up of Train 1 in 1998. followed by Trains 2 and 3 in 2002 and 2003 severally and Train 4 in 2005 has lowered the country’s Reserve to Production ratio from a comfy 38. 1 old ages in 2001 to a more upsetting 10. 3 in 2009 ( see Table 1 ) . This means that the state must bore of all time faster. further and deeper merely to remain on an even keel.
The modesty to production ratio spoken of is the result of the accounting for the province of the twin islands’ gas militias performed on behalf of the GoRTT by independent modesty enfranchisement bureau Ryder Scott of Houston. and is called the Trinidad and Tobago Natural Gas Audit. Recently it has revealed a go oning tendency of diminishing proved militias and increasing production degrees ( see Table 1 ) . A likely cause for this – the National Energy Corporation’s ( NEC ) success in pulling some of the largest and most province of art natural gas devouring industries in the universe. which lead to increased production ( see Table 1 ) . Another is the failed 2006 Gas Acreage Bid Round. practically boycotted by the industry. which meant that geographic expedition in the deep H2O Atlantic blocks offshore the E of the island ( which are non included in the Ryder Scott audit ) and the shallower blocks of the E and north seashore. was delayed while the Government technocrats attempted to make an attractive revenue enhancement environment. As a effect of this. the Ministry of Energy’s 100 % modesty replacing mark of nine geographic expedition Wellss a twelvemonth has non been met.
