Faced with plant closure due to the natural gas shortages and the need to keep its business running in the long term, Proman Group invested in the upstream and will now be able to supply 70 million standard cubic feet a day of natural gas through its Methanol Holding plant in Point Lisas.
This is a significant achievement, not in terms of the relatively modest amount of gas to be provided by De Nevo Energy, but it’s the first time that a local downstream company has ventured upstream and, in the process, has been able to secure some of the gas it needs to power its plants.
More than that, through the signing of a gas sales contract, the company has been able to convince the NGC that its gas must be reserved exclusively for its use.
President of the NGC Mark Loquan confirmed to Business & Money that the arrangement is that DeNovo’s gas will go to MHTL but it will pass through NGC’s pipelines.
This seems to square with what is contained in the government’s budget document, State Enterprise Investment Programme 2019, that was recently laid in the Parliament.
The budget document noted that the NGC will build a 20-inch diameter pipeline from the outlet of the DeNovo Gas Processing Unit, Point Lisas, which is currently under construction, to the inlet of NGC’s Phoenix Park Valve Station.
It said the NGC has initiated a desktop study to identify conceptual design and routing for the proposed pipeline. The estimated cost of this project is $196.3 million with projected expenditure of $81.2 million for fiscal 2019. In addition, a pipeline will be constructed from DeNovo’s Gas Processing Unit to MHTL .
The report read, “A 14-inch diameter onshore natural gas pipeline running from the fiscalisation meter at the gas processing unit located at the De Novo Energy Block 1A Ltd battery limits to the gas inlet of the MHTL methanol facility is being constructed. The line measures approximately 3.4 kilometers and is expected to cost $28.8 million. The line is expected to be commissioned by the end of fiscal 2018.”
The National Gas Company and DeNovo Energy Ltd (DeNovo) recently announced that the two companies had signed a Gas Sales Agreement (GSA) for the sale of natural gas from DeNovo’s Block 1(a) asset to NGC.
NGC, through NGC E&P Investments Ltd (NGC E&P), owns 20 per cent of Block 1(a) through a joint venture with DeNovo who owns 80 per cent as the operator.
The GSA was signed in anticipation of DeNovo’s delivery of natural gas later this year from the Iguana field in Block 1(a), which is the first natural gas development to take place in the Gulf of Paria, of Trinidad’s west coast. The agreement also brought a new upstream player into the gas supply stream as DeNovo will become the 5th gas producer in the country.
The release said, “This is in line with the strategic priorities of both companies to increase natural gas production for use by the petrochemical sector in T&T by monetising proven stranded natural gas reserves.
DeNovo’s chief executive officer, Joel “Monty” Pemberton had described the deal as, “the perfect example of private sector industry and state collaboration, enabling an innovative resolution to the ongoing challenge to fulfil the natural gas demand in our country.”
Pemberton explained, “DeNovo is the first local upstream company to operate an offshore gas field, using the best local expertise with relevant global partnerships in the development of our country’s natural gas resources. This was achieved through a strategic investment by the Proman Group to contribute to T&T’s natural gas supply for the benefit of all stakeholders.
In the past, bpTT through its partnership with Methanex has provided gas directly to the downstream and so to EOG in its partnership with the Proman Group also provide gas to its investment in ammonia.