Changing
oil dynamics - Trinidad proposes refinery, natural
gas line deals with Venezuela
By Linda Hutchinson-Jafar, Business Writer
Jamaica
Gleanner
Kingston
Petroleumworldtt.com
04 29 07
PATRICK MANNING has proposed that oil capitals
Caracas and Port-of-Spain collaborate on building
a new oil refinery in Trinidad, capable of processing
250,000 barrels of crude per day, but also wants
to deepen their relationship on energy despite
fears his country's traditional role as dominant
oil force in Caribbean Community (CARICOM) isabout
to be usurped.
Manning has also raised with his counterpart Hugo
Chvez the possibility of Venezuela taking an interest
in the development of 'Train X', a natural gas
line that Port-of-Spain is still defending as a
viable project.
Chavez is expected to visit Port-of-Spain this
month, Manning said, at which time, armed with
technical advice, he is expected to give a more
precise reading of whether Caracas will partner
with Trinidad on its energy development plans.
That meeting follows bilateral talks between the
two leaders March 20 when Manning visited Chvez
to sign the energy accord on the sharing of the
10 trillion cubic feet of natural gas reserves
in the Loran Fields located on their shared maritime
border - split 75:25 in favour of Venezuela.
Discussing broader issues
Manning had signalled ahead of the visit that
he planned to discuss broader issues relating to
energy security for CARICOM, even then contemplating
his country's likely displacement as the dominant
oil force in the 15-member bloc.
"What we have advanced is a comprehensive
Memorandum of Understanding (MoU) to the Venezuelan
government for collaboration between Venezuela
and Trinidad and Tobago in energy development," said
Manning.
"They
have agreed to study it and President Chvez has
agreed to come to Trinidad about mid-April
to sign, whatever arises out of the technical discussions
that will now follow the submission of that MoU."
End of chilly relationship
The bilateral meeting between Chvez and Manning
brought an end to a chilly relationship that developed
two years ago when Trinidad and Tobago opted not
to sign the PetroCaribe oil initiative which was
supported by 13 members of the CARICOM.
Barbados also did not sign the agreement, saying
later that it put Trinidad, the regional oil supplier,
at a disadvantage and that it was worried about
the accumulation of long-term debt under PetroCaribe.
The signing of the unitisation agreement, Manning
suggests, gives his country a source of supply
for the Train X.
Manning also proposed to Chvez that the Loran-Manatee
Train X, as he called it, should be landed in Trinidad,
saying that a 56-inch pipeline which was recently
laid in his country is designed to take another
800 million cubic feet of gas.
"Because of the location of that gas field,
the economics of bringing gas to shore favours
Trinidad and Tobago as opposed to Venezuela itself," he
said.
Caracas, in the meantime, despite its plans to
become a net exporter of natural gas this year,
is still lagging behind with its US$2.7 billion
LNG export plant in Giria, from which gas from
the Mariscal Sucre project and the Deltana Platform
would feed to produce 4.7 million tonnes of LNG
annually.
On the proposal to Venezuela to partner on the
oil refinery, Manning said his country already
processes crude at its state-owned Petrotrin refinery
from Venezuela and Brazil.
"Our first proposal was collaboration with
Venezuela on the petroleum aspects of PetroCaribe.
That has become necessary because a number of countries
in the region have themselves signed on to the
PetroCaribe arrange-ment which, as you know, threatens
to displace Trinidad and Tobago as the dominant
supplier of petroleum products to the region," said
the Trinidad PM.
Threatened
displacement of t&t
"With
the position of dominant supplier comes the responsibility
to guarantee energy security.
And if Trinidad and Tobago is displaced as the
dominant supplier, then Trinidad and Tobago cannot
accept responsibility for guaranteeing energy security
to CARICOM countries. It is as plain as that."
With such a reality facing the Government, Trinidad
has taken a decision to upgrade the existing refinery
at a cost of US$850 million. That plan includes
a gasolene optimisation programme which will raise
the octane number of the gasolene pool sold to
the east coast of the United States.
Another aspect is gas/oil optimisation, part of
which is the construction of a gas to liquids plant,
whose output will be sold to the higher-end markets.
"One of the big flaws of that approach is
that it still needs the refinery and that about
35 per cent of its output is fuel oil. None of
the refineries in the United States or elsewhere
does that. To be able to deal with that will require
an investment of about US$2 billion," said
Manning.
"We
have taken a conscious decision in Trinidad and
Tobago that we will not move to step three."
Th is developing a second refinery which will
have the capacity to treat the fuel oil coming
out of the Petrotrin refinery. Trinidad is also
having discussions with Brazil on the project,
which has sent a team to Port-of-Spain for discussions.
business@gleanerjm.com
business@gleanerjm.com
Jamaica
Gleanner
April 20, 2007
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