Williams: TT must move to keep oil $$

Minister of Energy and Energy Industries, Eric Williams, yesterday said one of the challenges facing TT’s growing economy and petroleum sector was how to keep revenue in TT. Williams referred to plans by the Government to increase its participation in the Liquefied Natural Gas (LNG) market by getting into LNG receiving, shipping and re-gasification terminals. While oil was the dominant hydrocarbon for 80 years, gas production surpassed oil for the first time in 1996. Between 1975 and 2001, the compounded annual rate of gas production was 8.2 percent, and this increased in the years 1996-2000 to 19 percent.

Williams said today’s oil production has surpassed the “oil boom years” and, by 2008, it is projected that TT will produce one billion barrels of oil equivalent, comprising mainly natural gas. He said the increase is tied to large gas-based products with long-term contracts. Williams also said prices are expected to rise in the future. “Our challenge is to convert this production into revenues with value for our people in a win-win combination for the investor and the people of TT,” Williams said at the opening of the two-day Latin America and Caribbean conference at Hilton Trinidad. Williams said the challenge is more acute because despite growth in TT’s Gross Domestic Product (GDP) (6.7 percent) and petroleum sector (9.5 percent), there is a growing gap between GDP and Gross National Product (GNP). “The gap is in the vicinity of $2.7 billion in 2003. This signals that while we are growing, much of the funds generated from that growth are still being repatriated overseas.”

He said the demand for TT’s LNG would continue when Atlantic LNG Train IV becomes established in 2006. Williams said ammonia, methanol industries and power generation, in this order, are also heavy users of natural gas. The United States is the major market for LNG from Trinidad, accounting for 77 percent of its total imports in 2003 and reaching 80 percent for the first quarter of this year. Williams outlined some of the “growth areas” in which TT would be seeking to create greater value for LNG. Construction has started on an offshore platform at La Brea and on a 56-inch pipeline across the island with 70 percent local content. Williams announced that Government has received 12 proposals for partnerships in re-gasification terminal projects in the US. He cited the memorandum of understanding signed with Freeport McMoran, promoters of the Main Pass Energy Project. “The facility is located offshore Louisiana and is in close proximity to several major natural gas distribution pipelines.” Williams said the project involved storage of gas in underground salt caverns. He said this allowed flexibility in the marketing of gas.

Dr Alirio Parra, senior associate at CWC Associates Ltd, and Former Minister of Energy and Mines in Venezuela, said natural gas is the fastest growing component in the energy sector at a rate of 2.5 percent annually and will continue to increase. Parra, in his opening remarks, said pipeline gas and LNG would be the great “enablers” in bridging the deficit in countries where there is a deficit because consumption was outstripping supply. He said demand had surpassed supply in the United States, Mexico and Chile. Parra said Latin America and the Caribbean had an amazing role to play with the expected growth in demand domestically, regionally and internationally.