Trinidad aces US LNG supply

This tiny island was a launching pad for US troops sent into Africa during World War II. Now the Caribbean nation is the launching pad for another war, this one aimed at helping avert a looming energy crisis in the United States. The United States has turned to the Republic of Trinidad and Tobago as a supplier of liquefied natural gas as domestic production of natural gas and imports from Canada decline. Federal Reserve Chairman Alan Greenspan has pushed US development of liquefied natural gas intake facilities, warning Congress that manufacturing plants and other businesses dependent on gas could close because of tight supplies and price spikes. Some already have.

But opening US ports to giant oceangoing tankers, which transport the gas after it has been superchilled and turned into a liquid 600 times denser than its gaseous state, has instilled fears. Three years ago, residents near picturesque Cove Point, Md, site of the largest of four liquefied natural gas receiving facilities in the United States, raised security and safety concerns when then-owner Williams Cos moved to reopen the plant, which had been mothballed for two decades. Dominion Resour-ces bought the plant last year. “I didn’t sleep for two nights when I heard that the plant was going to be reactivated,” said Elroy McLeod, of nearby Huntington, Md, who fought the plant’s reopening during local hearings.

A pipeline transports pressurised gas near the Calvert Cliffs Nuclear Power Plant, a proximity that vexes McLeod. He noted that a pipeline explosion in New Mexico in 2000 blew open a 40-foot wide crater and killed more than a dozen people camping in the area. But Daniel Donovan, a Dominion spokesman, said the pipeline and the nuclear plant were two miles away at their closest point. “Transporting natural gas by pipeline is one of the safest methods of energy transport,” he said. The Federal Energy Regulatory Commission approved the Dominion plant’s reopening, noting that liquefied gas has been shipped to other parts of the United States for 40 years without incident. Once natural gas has been liquefied, its greatly reduced volume makes it easier and more economical to transport. Europe and Asia have imported it for decades.

Still, other objections are likely to be raised here as such plants are proposed along coastal waterways. So far, about 20 projects have been announced in locations ranging from Long Beach, Calif, to Mobile, Ala, and Harpswell, Maine, though not all are expected to obtain financing and permits. Trini-dad stands to boom economically as a result of the US need for gas. In the first half of this year alone, Trinidad supplied 76 percent of the liquefied gas shipped to the states, according to the Energy Information Adminis-tration. Nigeria and Algeria supplied the rest. “Trinidad has big ideas about what it wants to do, now that it has captured the largest LNG market in the world: the US,” said Vincent Pereira, president for market development in Trinidad for London-based BP. A consortium that included BP and Trinidad’s National Gas Co joined forces to build the processing plant in Trinidad: Atlantic LNG Co of Trinidad and Tobago. The plant is undergoing a $1.2 billion expansion, and there is talk of yet another addition. “Trinidad is blessed geographically,” explained Pereira, noting that it is only about 2,000 miles or eight days by tanker from the US East Coast. Another major market, Spain, is 16 days away.

Already the world’s fifth-largest liquefied natural gas producer and the largest in the Western Hemisphere, Trinidad will get even bigger. So ritical is the relationship between Trinidad and the United States that Trinidad’s energy minister, Eric Williams, was invited to Washington earlier this year to discuss his country’s readiness to supply the gas. “When Greenspan said what he said, it was not a surprise to us to hear,” said Williams, noting that in recent months most of Trinidad’s liquefied gas cargoes destined for Spain were redirected to the United States. “The cargoes going to the US are much more valuable” because they command a higher price, Williams said. With its expansion, the Atlantic LNG Co plant will become the world’s largest liquefied natural gas processing plant.

The country is building two pipelines to allow more gas to be shipped to the plant and is making plans to turn gas from Venezuela, an important US oil supplier, into liquefied natural gas. Athough Trinidad’s gas has been marketable only since 1999, liquefied gas already accounts for 13 percent of Trinidad’s budget. Energy dollars, including revenues from petroleum production, provide about 25 percent of Trinidad’s budget of roughly $3.72 billion. Yet the twin-island nation of 1.3 million people has an average gross national product per capita of $7,262. Unemployment stands at 10 percent despite nine consecutive years of positive growth, according to the International Monetary Fund. “Part of our challenge is to leverage the energy sector to grow the nonenergy sector,” said Williams, Trinidad’s energy minister.

Mayon Murray, general manager of the National Federal Credit Union and Point Fortin’s unofficial mayor, wants to see more benefits to the communities in the vicinity of the Atlantic liquefied natural gas plant. “What we want is a larger chunk of local content,” he said. Small contractors could provide catering and housing to Atlantic LNG, Murray said. In the oil- and gas-rich coastal town of Mayaro, where BP took over Amoco’s former operations, BP has parceled out $1 million in small-business loans. The money has helped 40 businesses and created 80 jobs, said Kester De Verteuil, the programme’s general manager. Cameron, 72, who operates two fishing boats off Guayaguayare Bay on the island’s southeast coast, used such a loan to buy a $23,000 van. Now, she can transport her fish, and those of other fishermen, to the market in Port-of-Spain, Trinidad’s capital, located on the northwest corner of the island. “Energy’s been very good for the people of Trinidad, but not so good for the people here,” Cameron said, surveying the littered beach. “We have no fishing port here. The roads are terrible. At least with this loan, they are doing something. BP has made quite a lot of difference.”