TTMA, NGC sign light consumer gas agreement

Signing of the agreement, which means gas will be sold to consumers at a reduced price of US20 cents/MMBtu, were presidents of the NGC and TTMA, Frank Look Kin and Paul Quesnel, respectively.

NGC will contribute the equivalent of US20 cents/MMBtu from every US$1 of gas consumed by the sector into an industry fund for a period of four years with effect from December 2004 (retroactive).

The fund will be managed by NGC and administered jointly by a committee with representation from the NGC, TTMA and the Ministry of Energy and Energy Industries.

The LIC has been broadly classified as having a gas demand less than two million standard cubic feet per day (MMscf/d), of which there are some 140 such consumers, out of which, 108 are active, according to Look Kin.

He noted that the LIC sector consumed an average of 15 MMscf/d or 1.1 percent of NGC’s total daily output of 1,350 MMscf/d in 2004. He was convinced that the LIC sector would grow and that natural gas would increasingly become the fuel of choice for small industrial and commercial businesses.

"Though the LIC represents a relatively small portion of NGC’s total sales portfolio, it is recognised as a critical niche which generates relatively high levels of employment and national growth," Look Kin said.

He added that NGC was expanding "its distribution network with committed expenditure of over $30 million for the next three years with new distribution lines planned for Diamond Vale Industrial Estate, Gulf City, Otaheite Industrial Park and Wallerfield Park.

Look Kin added that NGC connects LIC customers to the network on a cost of service basis where the company pays for the main distribution line with the customer having the option to pay for the metering station and the associated interconnection piping or having NGC pay for the facilities and recover its investment by means of a surcharge. Look Kin added that the "two different pricing schedules apply depending on the option selected." He also said that "the majority of NGC’s customers have opted for the first schedule, bearing the full cost for the infrastructural development and benefitting from the resultant lower gas price."

Look Kin said that bonafide applicants will have access to the following initiatives — payment of technical studies to improve plant and operational efficiencies, to improve expansion studies; to enhance strategic marketing studies to facilitate growth and expansion, and to develop new products. The fund will also be used to set up the Institute of Manufacturing, an institution being promoted by the TTMA.

TTMA president Paul Quesnel said the agreement "was a major landmark in the development of a new era of manufacturing in the country."

He thanked the many stakeholders who initiated discussions to make the agreement a reality and said that "it will now harness the competitive advantage of this country’s natural gas resources to benefit everyone in the productive sector.

"We will now be using energy for the creation of sustainable employment," Quesnel said.