TT Local
conglomerates lead downstream expansion
Methanol
Holdings Trinidad Limited
plant
By
Energy Correspondent
Trinidad & Tobago Express
Port
Spain
Petroleumworldtrinidad.com
05 21 06
IT WAS in the 2004 budget speech that Prime Minister
Patrick Manning announced that Government would
not entertain any more investment proposals in the
petrochemical sector unless it included an element
of downstream value added. Two years on, that policy
decision seems to be reaping a bountiful harvest
with the announcement of investment decisions for
two mega petrochemical projects. Interestingly both
are led by local conglomerates.
The
first was the US$1.5 billion Mega Downstream Petrochemical
Project, (MDPP) led by local methanol giant, Methanol
Holdings Trinidad Limited, a subsidiary of Lawrence
Duprey's CL Financial. The targeted output of this
complex is Urea Ammonia Nitrate (UAN) and melamine.
The
second was the announcement by another local conglomerate
Ansa McAl, of an investment decision for an US$800
million UAN plant, to be sited at the Union Industrial
Estate. Both projects include the downstream element
specifically targeted by the Government. Both plants
are expected to come on stream in 2009.
UAN
is a nitrogen solution used in direct fertilizer
application. The processing goes beyond the primary
production of ammonia, which is currently produced
in abundance at Point Lisas. The melamine plant
is really the exciting prospect. More than 90 per
cent of the world's melamine is used as a raw material
to make a liquid resin- amino-formaldehyde, which
is then processed into a variety of applications
such as laminates, wood adhesives, surface coatings,
moulding compounds, tableware textile treatments,
paper coating and as a leather tanning agent. The
availability of this valuable feedstock in Trinidad
opens up myriad possibilities for further downstream
manufacturing, with relatively lower capital requirements,
that is within the reach of a wider cross-section
of the local private sector.
The
new MDPP represents another major contribution of
CL Financial - parent company of MHTL- to the local
petrochemical business and economy. Since its initial
investment in the Caribbean Methanol Company (CMC)
some 15 years ago, the local conglomerate has spawned
investments in the petrochemical sub-sector of an
estimated US$3.5 billion. Its energy sector holdings
now include five methanol and two ammonia plants.
MHTL is the second largest methanol producer in
the world, with production capacity levels at approximately
four million tones per year (MTPY) or 12 per cent
of world production. Its status is largely due to
the capabilities of the M5000 methanol plant, which
produces 1.9 million tones per year, making it the
largest methanol production platform on the planet.
With
the push toward local content and capability enhancement,
MHTL has again proven itself to be a pioneer. The
conglomerate evolved out of the local downstream
energy sector, with local initiative, ownership
and management, to become a world leader in the
methanol business. It has its sights set on becoming
a global petrochemical powerhouse. MHTL already
has made investments in a methanol project in Oman.
The
success of MHTL has repudiated the general belief
that local capacity to successfully take a major
stake in the natural gas business does not exist.
The mindset that Trinidad and Tobago must look to
transnational firms to spearhead investment efforts
has been rebuff by the actions of MHTL. They have
made skillful use of their strategic investment
partners over the last 15 years. No foreign company,
including the ones that have been stationed here
for decades in the same industry, has reinvested
in Trinidad and Tobago on the scale achieved by
MHTL. Why is it then that companies in the same
line of industry and aware of the same opportunities
can react so differently? Perhaps it is a matter
of where their strategic interests lie. For many,
further downstream processing in Trinidad was and
still is now a strategic option in the context of
their global operations. In other words, country
interest and global company strategy do not converge.
MHTL,
therefore, can be seen as a paragon of the merits
of encouraging local capability and capital in the
development of the leading sector of this economy.
It has been an exemplar in the acquisition and implementation
of technical and commercial know-how in the pursuit
of its strategic goals. It is heartening to see
that another local conglomerate Ansa McAl, finally
has built up the courage to follow Duprey's footsteps.
Feedback: energyczartt@yahoo.com
Trinidad & Tobago Express
Thursday,
May 18th 2006
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2005Trinidad Express. All Rights Reserved.
