Opinion
- Editorial
Trinidad
Guardian :
Clarity
needed on gas reserves
Editorial
The
inability of the Government of T&T to honour
the memorandum of understanding struck with Jamaica
two years ago to supply its Caricom partner with
150 mmcf/d of LNG for a 20-year period could be
the first indication that the coming on stream of
gas reserves is not working in the manner projected.
If that proves to be so, it is almost
too frightening to contemplate and could have serious
implications down the road for the economy and society.
Certainly, quite a few companies
are very optimistic about making significant new
finds and bringing into production large quantities
of the raw natural gas. Indeed, the news is that
Venezuela and T&T are close to reaching an agreement
to unitise the reservoirs which lie between the
two countries offshore.
The expectation is that that agreement
could significantly enhance this country’s
gas reserves. That however is in the future and
subject to quite a number of issues, not least of
which are the political ambitions and predispositions
of Venezuelan President Hugo Chavez.
The MOU between Jamaica and T&T
envisaged the north Caribbean country being supplied
with LNG from a new production facility at Point
Fortin—now called Train X.
But even if bringing raw gas into
production and finding new fields will not be a
problem in the long run, the inability to supply
Jamaica with LNG in the next two years could be
a sign that the production schedule is not being
realised as quickly as planned.
However, there could be other reasons
inside the mix that influenced the backing-away
from the terms of the MOU, reasons which are not
readily discernible on the surface.
The projected supply of LNG to Jamaica
was directed at the cheaper production of electricity
for domestic use. In this direct manner, the “more
stable and competitive prices” of LNG talked
about by then Jamaican Prime Minister PJ Patterson
could bring down the burden of high energy costs
on the average Jamaican.
Such a possible outcome would also
be good news for this country as Jamaica is the
largest market for T&T-made goods in the region.
Therefore, dollars saved from lower energy costs
could go towards the purchase of manufactured goods
originating in Port-of-Spain.
However, lower electricity rates
would also benefit Alcoa’s alumina operations
in Jamaica: the company would be then getting benefits
of lower LNG prices for its smelter operations in
Trinidad (assuming that comes to pass) and cheaper
electricity rates for its alumina operations in
Jamaica.
It could be that the Government
is having second thoughts about Alcoa’s easy
ride. This is a concern raised by Prime Minister
Patrick Manning himself.
Secondly, could the Government here
be reacting to its Caricom partners who ran off
and signed onto Petro Caribe without as much as
a word of dialogue on the matter amongst themselves?
Further, is T&T now prepared
to move almost completely aside and allow Venezuela
to take over what can be conceived as the “burden”
of shielding Caricom member states from the phenomenon
of continuing high oil and energy prices?
Already Foreign Minister Arnold
Piggott has said that Venezuela is likely to replace
T&T as the major supplier of energy products
to Caricom.
But what does that mean for state-owned
Petrotrin, the company from which supplies to Caricom
comes? If Venezuela takes over supplies to Caricom,
will T&T be able to continue its multi-million-dollar
oil facility to Caricom countries?
There are a number of serious issues
to be contemplated which are not yet clear.
The Trinidad Guardian is one the most important
news papers in Trinidad and Tobago. Petroleumworld
not necessarily share these views.
Editor's
Note: This article was first publish in Trinidad
Guardian on,
February 23th 2007. Petroleumworld reprint this
article in the interest of our readers.
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02/25/07
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