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NGC?plans to hike natural gas output
Mar 24, 2016
Even though ArcelorMittal closed its doors due to the factors in its global external environment, National Gas Company (NGC) chairman, Gerry Brooks, said the gas shortage to the plant was not the reason for the plant shutting down. This means, he said, other plants at the Point Lisas Estate would not shutdown as a result of shortage of gas.
According to Brooks, a gas shortage has existed in the energy sector since 2010. In total, domestic consumption is between 1.5 billion cubic feet and 1.7 per day. That consumption figure would be dependent on whether the plants are up and running or whether they are down for maintenance.
Addressing the issue as to whether other companies on the industrial estate had approached NGC indicating a problem with gas shortage, Brooks confirmed but added the company has always worked closely with the players.
“They have approached us because, remember, we are the aggregator of gas, we do not produce the gas. What we have done in the past is work with the upstream companies and the downstreamers to have a joint coordinated effort.”
Asked what NGC has done to mitigate the problem of a gas shortage, Brooks said the company has many initiatives in place which are estimated to increase the volume of gas by between 100 million and 200 million standard cubic feet/mmscf.
He added that measures are expected to be rolled out between 2017 and 2020.
“We have worked very closely to coordinate supply between the upstream companies: bpTT, BHP, Shell, Repsol with the downstream companies who require supply.”
In its summary financial statements for the year ended December 2015, TTNGL reported an increase in assets from $2.9 billion in 2014 to $3.2 billion in 2015.
According to the chairman’s statement accompanying the summary financial statements: “The T&T NGL Ltd recorded after tax earnings of $402.8 million in 2015. This is a significant improvement over the loss of $804.2 million incurred in 2014. It is commendable given the global decline in energy prices and the very challenging industry conditions.”
Long-term, medium-term and short-term measures have been implemented to mitigate the problem, Brooks said.
“We are meeting regularly with the Point Lisas Energy Association and we are coordinating the maintenance of plant on the upstream side, with the maintenance of plant on the downstream side, to ensure that we optimise the supply of gas to the downstream companies.”
The Point Lisas Energy Association comprise executives from companies that produce ammonia, methanol, urea and iron and steel and all are located in Point Lisas.
With this application of managing the gas curtailment, the company has had a “good run” year to date.
Another potential measure to mitigate gas shortage is improving the supply through innovation: “We have a project called TROC (Trinidad Region Onshore Compression project). We are using compression techniques to improve the supply of gas. We are in discussions with bpTT and other colleagues and we are close to completion of moving multilateral and bilateral agreements that would facilitate that.
The next project that NGC will be undertaking is the propane-to-downstream project.
“This will utilise propane as a feedstock for some of the downstream companies which we are prepared to fund and which we are also prepared to approve through our investment process. That has the potential to bring 100 million or 200 million standard cubic feet (mmscf) on a daily basis to help alleviate the problem. That is a 2017 initiative.”
He said NGC is also examining how it facilitates Juniper since that project is estimated to bring 585 million standard cubic feet (mmscf) of gas on stream.
Smaller marginal fields are also part of NGC’s measures to mitigate the gas shortage.
“The small and marginal fields are the fields that have a potential to bring approximately 80, 100, 150 and sometimes 200 million standard cubic feet of gas to the table.
“We are mapping that, relative to the world (programmes) of the upstreamers and or independent companies, and linking that back to infrastructure, asking: how can we realise production from these fields in the shortest possible time so it will liberate more gas and help us to get past this curtailment problem?”
In the longer term, he said: “The work (programmes) of upstream companies from an exploration standpoint to drilling in the deep is going to be important, as well as our work on Loran/Manatee. Remember that has 10 trillion cubic feet of gas.
“That work is taking place from a commercial standpoint (export) and a country standpoint (to service companies in the energy sector). We recognise that it is a difficulty and I think we have a number of people and organisations working closely to try to solve it.
“There is no silver bullet that is going to cure (the gas shortage) in 2016. What we are doing is building the foundation: maintenance, the propane-to-downstream project, the TROC project, Juniper in 2018, our exploration programmes, drilling in the deep, Loran/Manatee.” These measures, Brooks said, would be in place throughout the period between 2017 and 2020.
No port talks
Brooks’ optimism at the end of the gas shortage, comes as president of the Plipdeco port, Ashley Taylor, indicated in an interview with Business Guardian last week, that ArcelorMittal never said it was having any challenges. He also added there was no monetary impact on the port’s bottomline concerning ArcelorMittal’s pull out.
According to the 2015 third quarterly results, the Point Lisas Industrial Port Development Corporation Ltd earned revenue from not only being a landlord to its 103 tenants but from various port facilities.
“Containerised cargo operations experienced a 15 per cent increase in throughput when compared to the same period in 2014. When further segregated, the data showed a four per cent increase in imports, an eight per cent increase in exports and a 60 per cent increase in transshipment cargo.
“General cargo experienced a 10 per cent decline due to an 88 per cent decrease in exports, a one per cent increase in imports and a four per cent increase in transshipment,” Taylor said in the report.
While there were many factors affecting ArcelorMittal’s total operations, one major factor the company faced was an oversupply of steel in the global market. According to a September 3, 2015 article in Forbes magazine: “The Chinese steel industry is currently characterised by an oversupply situation, primarily due to a slowing Chinese economy.
“Chinese steel production stood at 823 million tonnes in 2014. Steel production in China comfortably outstripped demand in 2014, which stood at 711 million tonnes. Weak domestic demand has provided a sharp boost to Chinese steel exports, which rose 27 per cent year-over-year in the first seven months of 2015.”
ArcelorMittal also explained in its 2015 financials that the China Iron and Steel Association (CISA) had started to export to the markets in which ArcelorMittal had a presence.
“While the majority of these exports are directed to Asia, an increasing proportion is being directed toward ArcelorMittal’s core markets, Europe in particular. While not a sustainable long-term strategy, Chinese exports in 2015 were increasingly being sold at prices below cost (CISA reports large and medium-sized mills losing RMB 53 billion (US$8.6 billion) from January through November 2015), negatively impacting prices and therefore margins in many regions.”