Govt approves new US$100M gas plant

ENERGY MINISTER Eric Williams announced that Government’s investment in a new US$100 million gas-to-liquids (GTL) plant to be established at Petrotrin’s Pointe-a-Pierre refinery will ensure the production of efficient/environmentally-friendly fuels for local consumption, noting that Government has no plans to increase the cost of transportation fuels in Trinidad and Tobago. Addressing yesterday’s post-Cabinet news conference at Whitehall, Williams said Cabinet approved Petrotrin’s equity partnership participation in a GTL plant with US-based company World GTL Ltd, which comprises former senior executives from multi-national energy companies, some of whom have already worked in TT.

Recalling that Government had rejected past proposals for GTL plants in TT, Williams said Government accepted World GTL’s proposal because the plant requires only 125 billion cubic feet of natural gas over its lifespan, provides a return of 33 percent, is aligned with Petrotrin’s plans to produce quality fuels to meet local specifications and “advantageously participate in future refinery and other energy-related industry expansion.” Under the agreement, Petrotrin will acquire one-third equity stake in the plant (an investment of US$10 million) and there is a 70-30 debt financing arrangement.

Explaining that the plant will be constructed from the enhanced components of mothballed methanol plants, Williams said either Petrotrin or TT could obtain equity ownership in the start-up company overseeing the plant’s operations and either expand it or build other GTL plants elsewhere in TT, as the plant’s technology proves itself in terms of its commercial viability. He said the plant will be operational in the first quarter of 2007. The plant will produce 2,250 barrels of clean (no sulphur) diesel fuel which can be blended with diesel produced by Petrotrin’s refinery in order to improve the latter’s quality and the plant’s products will be marketed locally in the first instance, with the option to export the technology to places where natural gas is discovered.

Stating leaded gasoline has already been removed from the local market, Williams said Government is now focusing on the production of lead-free diesel fuels through Petrotrin’s new diesel optimisation initiative and a study is underway (by National Petroleum, the National Gas Company and British Gas) to determine the feasibility of marketing compressed natural gas (CNG). Recalling that Prime Minister Patrick Manning said in the 2004/2005 Budget that Government would consider increasing the price of diesel fuel as an incentive to shift away from diesel to CNG, Williams said there is “no plan at this time to increase the cost of transport fuels.”

The minister previously said Government will continue to subsidise the local cost of gasoline in the 2005/2006 Budget, which could be presented in Parliament on September 28. Williams also said the plant’s estimated natural gas of 18.4 million cubic feet per day, would not cause a major dent in the nation’s gas reserves in the context of projected gas usage in the energy sector. Williams also welcomed a decision by the US government to determine the location of LNG regasification terminals in the US. TT is currently in talks with US company Freeport McMoran about involvement in a regasification terminal which the company wants to build in southern US.