Williams: Cheaper cement, clay blocks soon

Consumers can expect a drop in prices for cement, clay building blocks and other materials in the next few weeks. Energy Minister Eric Williams, speaking in the Budget debate in the House of Representatives yesterday announced the National Gas Company (NGC) will reduce its gas prices to local manufacturers. “This will have the effect of reducing its cost of production. This price reduction will be predicated on the requirement that such savings will be passed on to local customers,” he said. Williams said Government was discussing the issue with the local Manufacturers Association (TTMA) and he expected the matter to be resolved shortly.

Addressing the issue of LNG, Williams said Government believed there was sufficient justification for the LNG contracts to be revisited as there was scope for increased returns to the country. He said under the marketing arrangements for Trains One to Three, LNG was contracted to be sold in the Spanish and US markets where the prices at the time were very comparable. Since then, he said, the Spanish market experienced declining prices due to increase sources of  supply of LNG and competition from alternative fuel sources, while the US market had been faced with high prices. Prices on the US market have averaged US$5.66 per million cubic feet, while Spanish prices have averaged US$3.03 per million cubic feet. He said the off-takers of LNG contracted to the Spanish market have been diverting cargoes destined for Spain to the more lucrative US market.

Williams said, “Those who framed the original contracts did not see the possibility of the diversion of cargoes and therefore the returns to Trinidad and Tobago are based on a formula derived from a destination in Spain. Cargoes are being diverted to the US market... but the revenue that is reported back to Trinidad and Tobago is the revenue as if it had gone to Spain. And therefore we are seeking to close that loophole. And that is why we wish to reopen the contract. It is not on a whim,” he said to heavy desk-thumping. The Minister also disclosed that NP was conducting a massive upgrade on 211gas station sites and an environmental clean-up programme over the next five years at an estimated cost of $444 million. Addressing the issue of the oil and gas reserves, Williams said there were proven oil reserves of 760 million barrels of oil, probable reserves of 358 million barrels of oil and possible reserves of 1,644 million barrels of oil for a total figure of 2,762 million barrels of oil. In the area of natural gas, there were proven reserves of 18.81 trillion cubic feet; probable reserves of 5.89 trillion cubic feet and possible reserves of 8.63 trillion cubic feet for a total figure of 33.33 trillion cubic feet.

He said crude oil production was expected to be 150,510 barrels of oil per day by the end of 2005, while natural gas production is anticipated to increase from 2.85 billion cubic feet per day to 3.22 billion cubic feet per day. Williams said the gap between GDP (the goods and services produced within Trinidad and Tobago) and the GNP (the goods and services produced by Trinidadians and Tobagonians inside and outside of this country) was TT $3.14 billion. “Our challenge is to reduce this gap,” he stated. Williams said Government was very concerned that the Quarry industry had not been effectively managed and monitored. He said Government was pursuing several initatives to effectively manage the Quarries industry. They are: (1) preparation of a new Quarries Policy to inform the drafting of new legislation; (2) One-year interim licences to quarry operators subject to certain conditions.