Gas
supply tight ...but NGC’s Look Kin anticipates
increase after 2007
By Sherwin Long
The Trinidad Guardian
Port
Spain
Petroleumworldtt.com
02 04 07
The
demand for natural gas in T&T rose by 25 per
cent in 2006 and consequently the National Gas Company
(NGC) has had to deal with concerns from its customers
over gas supply shortages.
For
the past year, Government has signalled its intention
to expand its petrochemical industrial base.
And
there have been consistent questions about on gas
availability for these projects.
NGC
President Frank Look Kin has admitted the gas supply
was tight.
In
an interview with the Guardian, he tried to put
these issues in perspective.
“You
have to put it in context. Yes, our supply has been
tight but look at the rapid growth in gas demand,”
Look Kin said.
He
cited gas utilisation in T&T for 2005, at three
billion cubic feet per day.
The
figure jumped to just under four billion cubic feet
per day in 2006, Look Kin estimated.
That
is an extra 25 per cent. It takes a while to handle
that capacity,” he said.
Look
Kin also alluded to the need for gas producers to
boost their infrastructure.
He
said during 2006 NGC faced supply concerns any time
one of the producers had technical problems with
their wells or platforms.
From
the last quarter of 2007 and onwards, Look Kin felt
the outlook would be different.
He
alluded to bpTT’s two new platforms—the
US $333 million Mango platform and the US $481 million
Cashima platform.
These
new platforms will add 1.5 billion cubic feet of
natural gas per day to the country’s output.
“Two
new platforms will come onstream in the fourth quarter
this year,” he said. “With this we will
have excess capacity. Right now we lack excess capacity.
Once a platform goes down we have supply difficulties.”
Last
month, at the sixth annual IBC Energy Caribbean
Conference, Look Kin also conceded that while gas
reserves had increased, they were insufficient.
We
had increases in reserves but not enough to necessarily
match the rate of growth of the utilisation of gas,”
he said during the conference.
Look
Kin noted that gas reserves increased by four trillion
cubic feet between 1993 to 1996.
However,
from 1996 to 2005 there has been only a six and
a half trillion cubic foot increase.
In
spite of this, Look Kin noted that bpTT’s
Ibis Deep failure and the less than favourable deep
water bid round would not immediately impact on
NGC.
But
rather these occurrences would affect future gas
supply, he said.
In
a lot of our contracts we have commitments with
producers,” he said. “If we sign for
x volume of gas we have the expectation that they
will deliver.”
Three
weeks ago the NGC signed an agreement with BG and
Chevron to supply 220 million cubic feet of gas
per day for a 15 year term beginning in 2009.
Look
Kin said NGC was currently finalising similar agreements
with two other major companies.
At
the conference, he said the NGC was also negotiating
with bhp Biliton, Eog Resources and BG for 550 million
cubic feet of gas that would come on stream in two
to three years.
Although
T&T is the number one exporter of LNG to the
US, he maintained the NGC had to strike a balance
between its overseas interests and local energy
sector supply concerns.
Look
Kin listed a number of current projects underway
to increase the pipeline infrastructure.
However,
their US$153 million Beachfield Upstream Development
pipeline has been delayed.
The
project was to be commissioned by last month.
“We
have faced construction difficulties. We have had
two pipeline buckles created, which are under repair
at this point in time,” he said. “We
faced a lot of difficult weather for pipeline completion
and it appears this will go into 2007.”
Acergy
is the contractor for the project and Look Kin said
in one instance a cable was corroded, which caused
the pipeline to buckle as it was being laid.
Look
Kin said the buckle has added to the cost of the
project, but he could not say by how much.
In
an e-mail, Leslie Ordone Burch, Acergy’s marketing
co-ordinator for the region, said the company was
not at liberty to make any comment on behalf of
the client regarding the project.
The
36-inch, 62.9 kilometre offshore pipeline was to
run from bpTT’s Cassia B Platform to Rustville,
Guayaguayare, and travel into an inlet receiving
facility at Beachfield.
Look
Kin side-stepped questions on the legal ramifications
of the pipeline not being completed on time.
Similarly,
bpTT officials referred all questions back to NGC
and said it was not the company’s policy to
give information on gas supply arrangements.
Apart
from the Beachfield Upstream Development project,
Look Kin contended that changes in gas transmission
infrastructure will be significant come 2007.
He
listed several projects which are scheduled to run
from 2007 to 2010.
Look
Kin said to strengthen gas distribution capability
in Point Lisas, ten miles of pipeline infrastructure
was being added.
A
ten-inch liquids pipeline from Pointe-a-Pierre to
Sea Lots and to Piarco to supply gasoline to North
T&T and jet fuel into the airport was being
constructed, he added.
In
addition, there will be an eight-inch line to provide
gas to TTEC power stations in Tobago, he said.
Look
Kin also said there was a transmission line in the
works to service the Union Industrial Estate in
La Brea.
He
also disclosed that the NGC was currently negotiating
a tranche of gas for a 60 km 24-inch pipeline to
bring gas onshore from the east coasts.
From
2007 to 2010, the capital expenditure for this pipeline
network is US $300 million, he estimated.
With
these upcoming projects, Look Kin was hopeful that
NGC’s gas supply ills would be cured in the
next few years.
However,
he was all too aware of current shortcomings.
He
gave a simplified summary of the situation.
If
you have two taxis serving ten passengers every
day and one taxi has to go for repairs, of course,
the other taxi would not be able to make up. But
if you have five taxis and one has to go for repairs,
you will be able to manage better,” he said,
pausing to giggle. “I don’t want to
make it sound this simplified but when the two platforms
come onstream this year we will be able to manage
better.”
The
Trinidad Guardian
Thursday 1st February, 2007
Copyright
©2006 Trinidad Guardian. All Rights Reserved.
