Page 4 - LatAmOil Week 03 2020

LatAmOil COMMENTARY LatAmOil
Titan Methanol plant under construction at Point Lisas complex (Photo: Tauxme.es)
Gas troubles in Trinidad and Tobago
The Caribbean state’s natural gas sector is under pressure, both at home and in the export market
WHAT:
As local LNG producers contend with competition from the US, domestic downstream operators are at odds with state- owned NGC over prices.
WHY:
These developments post problems for an industry that generates at least 15-20% of government revenues.
WHAT NEXT:
A former energy minister has urged the current administration to look for new policy solutions.
IN May 2019, Trinidad and Tobago’s National Gas Co. (NGC) published an article on its web- site that included speculation about the coun- try’s future in the face of shifts in the global natural gas industry.
The author of the article – Hayden Furlonge, NGC’s assistant manager of LNG and invest- ment analysis – concluded that the Caribbean state had a bright future, despite game-chang- ers such as the decline in US demand for LNG imports in the face of increased unconventional gas production.
The drying-up of the US market for LNG imports has the potential to be a problem for NGC over the long term. On the one hand, LNG accounts directly for about 15-20% of govern- ment revenues in Trinidad and Tobago, so the reduction in shipments to the US could cause the economy to take a hit.
On the other hand, the US can now produce so much low-cost gas that its own LNG produc- ers are in a position to compete effectively with
Trinidad and Tobago in other markets, such as Europe and Asia. They are also in a better posi- tion to meet demand from downstream buyers that use gas as feedstock, such as petrochemical plants and manufacturers of fertiliser.
Furlonge acknowledged these developments, but he remained optimistic.
“A redrawing of the world natural gas map is currently underway, and Trinidad and Toba- go’s place in it is assured,” he wrote. “After all, we helped draw the last one.”
This sunny outlook seems overstated, not least since the NGC representative noted in the same article that other markets might experi- ence similar disruption in the long term. China, for example, may see domestic unconventional gas output move upwards over the next few dec- ades, he said.
If so, it too will probably need to import less
LNG, as utilities, downstream buyers and other consumers will be able to access locally pro-
duced gas. 
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