Richard?Lord

State-owned Na­tion­al Gas Com­pa­ny (NGC) has about 20 per cent less gas to sup­ply its cus­tomers than is cur­rent­ly re­quired.

This was re­vealed by the com­pa­ny's con­sul­tant and tech­ni­cal ad­vis­er Frank Look Kin dur­ing a two-hour meet­ing yes­ter­day with the Joint Se­lect Com­mit­tee of Par­lia­ment on State En­ter­pris­es at J Hamil­ton-Mau­rice Room, Tow­er D, In­ter­na­tion­al Wa­ter­front Cen­tre, Port-of-Spain. The meet­ing was chaired by In­de­pen­dent Sen­a­tor David Small.

Look Kin was re­spond­ing to a ques­tion about chal­lenges fac­ing the com­pa­ny from JSC mem­ber and Min­is­ter of So­cial De­vel­op­ment and Fam­i­ly Ser­vices, Cher­rie-Ann Crichlow-Cock­burn.

He said NGC's cur­rent gas pro­duc­tion is "prob­a­bly about 20 per cent less than the vol­umes re­quired to ser­vice our cus­tomers." The sit­u­a­tion start­ed in 2008/2009 due to a com­bi­na­tion of fac­tors, he said, in­clud­ing "no new in­vest­ment, plat­form com­ing down for spe­cial main­te­nance and gas pro­duc­tion was falling"

From 2011 the gas sup­ply "was not suf­fi­cient to meet even the re­duced gas de­mand that we had in the coun­try" and the sit­u­a­tion con­tin­ues.

"It is about in 2017/18 that we will prob­a­bly see sig­nif­i­cant im­pact of new cap­i­tal in­vest­ment to raise the pro­duc­tion lev­els back up to be able to min­imise the short­age of gas that ex­ist in the coun­try to­day," he said.

Look Kin said when British Pe­tro­le­um's Trinidad Re­gion­al On-shore Com­pres­sion Project (TROC) and an­oth­er project come on stream there will be about 590 mil­lion cu­bic feet of gas. That will slow the rate of de­cline and re­sult in a high­er lev­el of gas avail­abil­i­ty. How­ev­er, he un­der­scored the need for "more cap­i­tal in­vest­ment in T&T to be able to gen­er­ate more gas."

An­oth­er op­tion be­ing con­sid­ered is im­por­ta­tion of gas from Venezuela, Look Kin added, but that is "a more medi­um to long-term prospect."

Small ex­pressed con­cern about the pay­ment of div­i­dends by the com­pa­ny over the past few years. He said in 2014 NGC's prof­it was $3.1 bil­lion and it paid $3.8 bil­lion in div­i­dends and in 2015 the prof­it was $605 mil­lion and paid $6.8 bil­lion in div­i­dends–a clear in­di­ca­tion of div­i­dends be­ing paid out of re­tail earn­ings, which is not the best fi­nan­cial prac­tice, he said.

The sen­a­tor said he want­ed to know the fac­tors that caused NGC "in the past three years, to put out near­ly $14 bil­lion in div­i­dends when that is more than dou­ble the amount of prof­its."

NGC act­ing vice pres­i­dent for Fi­nance Nar­ine­jit Pariag said the com­pa­ny has a div­i­dend pol­i­cy "which al­lows us to pay up to 99 per cent of out prof­it avail­able to (for) dis­tri­b­u­tion based on spe­cial re­quest from the share­hold­er." He said a spe­cial re­quest can be made an­nu­al­ly and the com­pa­ny "has paid div­i­dends in ex­cess of re­port­ed prof­it on an an­nu­al ba­sis over the last cou­ple years."

Pariag said at the end of last year NGC's gear­ing ra­tio was around 11 per cent and div­i­dend pay­ments were made with­out putting the com­pa­ny in­to jeop­ardy. In re­sponse to an­oth­er ques­tion, Pariag said at the end of 2015 NGC was owed $1.7 bil­lion. Act­ing pres­i­dent Maria Thorne said the com­pa­ny's new strate­gic plan for 2016 to 2020 is al­most com­plete and there is like­ly to be re­struc­tur­ing of man­age­ment.

She said the ap­point­ment of a per­ma­nent pres­i­dent is be­fore the board and should be de­ter­mined in due course.