The effect of price movements on the subsidy can be clearly seen through the period 2014 to 2016 when commodity prices began to fall sharply beginning October 2014. By the start of 2016 commodity prices had fallen by almost 60%. This had a downward effect on the magnitude of the electricity subsidy as the gap between the price paid for gas for used in petrochemicals fell closer to the subsidized price paid for gas for used in electricity. Consumption of electricity also had an effect on the downward movement of the subsidy.
Part 2 of the Understanding the Electricity Subsidy Series by Christopher Narine Thomas, Chairman of the Energy Efficiency and Alternative Energy Committe at the Energy Chamber.
Understanding the electricity subsidy. A series created by Christopher Narine Thomas, Chairman of the Energy Efficiency and Alternative Energy Committee
One of the key factors affecting Petrotrin is the margins under which they operate, this according to Petrotrin head, Fitzroy Harewood in May at an Energy Luncheon held by The Energy Chamber. Harewood provided a frank look at the company’s future given the “lower for longer” price environment. He said that the only way for the model to work is keep the cost of the raw materials down, and maximise the cost of finished products.
The Energy Chamber joins the business and national community in paying tribute to the late Dr. Anthony N. Sabga. We recognize the immense impact that Mr. Sabga’s life as an entrepreneur and visionary has had on the society of Trinidad and Tobago and the wider Caribbean.
The Board and Executive Office of the Energy Chamber joins with the membership in expressing deepest condolences to the family and colleagues of the late Henley Harewood.
All responsible stakeholders in the country must be disappointed by the decision not to construct the Angelin platform in La Brea. However, this decision has been driven by the need to ensure that natural gas is available in Trinidad & Tobago by early 2019. There are clear concerns that any interruptions to project delivery, whether due to labour unrest or other factors, would have serious implications for bpTT, the National Gas Company and the downstream processors and users of natural gas. This in turn would have serious implications for the overall national economy.
A strong safety culture is vital for the continued success and competitiveness of the Trinidad & Tobago energy sector. Every individual working on any energy sector facility has a duty to stop work in any situation that will put themselves or others in harm’s way. The misuse of this stop work duty by trade unions, as a cover for illegal strike action over pay, is extremely damaging to safety culture and undermines the entire safety management in the sector.
BP has a long history in Egypt and has been helping the country meet its energy needs for more than half a century, investing over $30 billion during that period. They also claim that with its partners, BP provides almost 10% of the country’s oil production and 40% of its gas and noted record investment in major projects in the Nile Delta set to significantly boost the supply of much-needed domestic energy.
BHP has recently moved its North American Petroleum Accounting and Reporting functions from Houston to Port of Spain, Trinidad and Tobago. At first sight, this may not seem a particularly newsworthy event, but the relocation of this important function represents a rare win in Trinidad and Tobago’s national diversification strategy, which has emphasised the development of service exports to complement the traditional export of oil, gas and petrochemicals. By relocating accounting services from Houston to Port of Spain, BHP will be exporting accounting services from Trinidad and Tobago to the USA and other countries in the region.
The signing of the first Local Content Charter took place during the opening ceremony of the Trinidad and Tobago Energy Conference 2017 hosted by the Energy Chamber. This signalled a commitment from the major operator companies in the energy sector to develop and implement local content initiatives that will serve to strengthen the energy services sector.
The Angelin project will be BP’s next major project in Trinidad and Tobago, following on from Juniper. Although Angelin has not yet been officially sanctioned, BP has begun submitting documents to the Environmental Management Authority (EMA) in Trinidad outlining the project development.
Methanol prices are once again climbing. Currently, they are higher than they have been in almost a year. The graph below shows the Methanex non-discounted price (USD), pegging the current price at $416/MT. It has not been at this price since August 2015.
At the Energy Conference, Slattery said that she was very encouraged by the large potential gas resource found at the LeClerc field (in block TTDAA5). She also mentioned that significant gas discoveries in the near term have the potential to hit the market in early to mid-2020’s. This is welcome news for Trinidad and Tobago’s gas-starved LNG and downstream sector.
With the Shell acquisition of BG completed, many people in the energy industry have been curious about Shell’s plans in Trinidad and Tobago. While Shell has had over 100 years’ presence in the country, there has been a lot of speculation about how, and even if, Trinidad and Tobago would feature in Shell’s future.
One of the major issues of discussion at the recently concluded Trinidad and Tobago Energy Conference 2017, was the institutional capacity of key government regulatory agencies. Trinidad and Tobago is facing the prospect of further significant declines in gas production from 2019 onwards, unless final investment decisions are taken immediately to develop new gas fields, such as bpTT’s Angelin project. These major investment decisions by international oil and gas companies rely upon timely decision-making by the government of Trinidad and Tobago.
The long-standing natural gas supply shortages have at last caught the attention of the Trinidad and Tobago public, with the decision of Methanol Holdings (Trinidad) Limited (MHTL) to shut down two of its five methanol plants on the Point Lisas Industrial Estate. Industrial Plant Services Limited (IPSL), who manages the plants for MHTL, has informed the Ministry of Labour that they will have to lay off workers in response to the plant closures.
The installation of two new engines at the Penal Power Station will help alleviate the country’s gas shortage as less gas will be needed in power generation, says Surindranath Ramsingh, general manager at the Power Generation Company of T&T (PowerGen).
The decision by Methanol Holdings Trinidad Ltd (MHTL) to close two of its methanol plants at the Point Lisas Industrial Estate has confirmed what many in the energy sector have known for some time—that the T&T natural gas sector is in trouble and, by extension, the country’s economy.
Undeniably, 2016 proved to be a challenging year for the global energy sector with worldwide energy markets experiencing the disruptive effects of depressed commodity prices. Trinidad and Tobago’s natural gas sector, was not spared the impact of global trends and its challenges were in fact compounded by ongoing gas curtailment issues. The situation of reduced natural gas supply to downstream consumers has been plaguing the local sector since 2010 and analyses of the current and predicted climate indicate that it will continue into 2017. As a result, securing the volumes required to maintain and support the demands of the industry remains a critical priority for NGC.
