T&T has lost its place as the largest ex­porter of am­mo­nia in the world ac­cord­ing to the lat­est in­dus­try fig­ures.

This is the first time in decades that this coun­try is not the pre­mier ex­porter of the com­mod­i­ty. It re­flects, among oth­er things, geopo­lit­i­cal is­sues in East­ern Eu­rope and the coun­try’s con­tin­ued gas cur­tail­ment.

For the first half of 2018, T&T ex­port­ed 1820.2 thou­sand met­ric tonnes of am­mo­nia. While this was a slight im­prove­ment of half of a per­cent­age point on the 2017 fig­ures, it was less than Rus­sia’s 1874.1 thou­sand met­ric tonnes.

Rus­sia’s ex­ports in­creased by a whop­ping 45 per cent ow­ing the chal­lenges in Ukraine, while T&T con­tin­ues to strug­gle to op­er­ate at full ca­pac­i­ty be­cause of con­tin­ued gas short­ages that have hurt pro­duc­ers who have not been able to max­imise economies of scale.

Sources at the Point Lisas In­dus­tri­al Es­tate in­di­cate that on av­er­age, plants have been op­er­at­ing at be­tween 80 and 85 per cent of their name plate ca­pac­i­ty. Com­pare this to plants op­er­at­ing be­tween 95 and 97 per cent of their name plate ca­pac­i­ty when they have their full quo­ta of nat­ur­al gas.

T&T has suf­fered nat­ur­al gas short­ages since 2014 and the sit­u­a­tion be­came pro­gres­sive­ly worse un­til the end of 2017 when bpTT’s Ju­niper project in­creased ag­gre­gate gas pro­duc­tion.

How­ev­er, the sit­u­a­tion has not been solved, with Roy­al Dutch Shell still pro­duc­ing just over half the gas it was pro­duc­ing at time of full sup­plies and bpTT not hav­ing ad­di­tion­al gas be­hind pipe to cater for any short­fall that may arise from oth­er pro­duc­ers.

The re­duced pro­duc­tion of am­mo­nia comes at a time when the prices have been good and there­fore re­flects a loss of rev­enue to the com­pa­nies op­er­at­ing on the es­tate and to the gov­ern­ment be­cause of tax­es on prof­its.

The Min­istry of En­er­gy’s month­ly Cab­i­net Note for Ju­ly 2018 demon­strates the chal­lenge: “Am­mo­nia prices con­tin­ued its up­ward trend in Ju­ly, with in­creas­es seen in most mar­kets un­der re­view. This was at­trib­ut­able to tight am­mo­nia sup­ply along with high gas prices in Eu­rope. Ad­di­tion­al­ly, main­te­nance work and pro­duc­tion out­ages from sev­er­al am­mo­nia pro­duc­ers con­tributed to high­er am­mo­nia prices.”

While there has been some im­prove­ment in nat­ur­al gas pro­duc­tion, on­ly re­cent­ly pres­i­dent of the Na­tion­al Gas Com­pa­ny Mark Lo­quan told the An­nu­al Gen­er­al Meet­ing of the En­er­gy Cham­ber that he sees gas cur­tail­ment con­tin­u­ing in­to the fu­ture.

Lo­quan said that is why the NGC is pur­su­ing a strat­e­gy to iden­ti­fy and em­bark on pro­duc­tion from the small pools of nat­ur­al gas that larg­er play­ers may con­sid­er un­eco­nom­ic to go af­ter. He said the NGC knows where the small ac­cu­mu­la­tions are lo­cat­ed and how close they are to ex­ist­ing in­fra­struc­ture.

In a re­cent ar­ti­cle in the com­pa­ny’s news­pa­per, Lo­quan de­scribed mar­gin­al fields as those that might be con­sid­ered un­eco­nom­ic or just mar­gin­al­ly eco­nom­i­cal­ly pos­i­tive un­der cur­rent fis­cal terms. The NGC’s Pres­i­dent said the com­pa­ny un­der­took a fea­si­bil­i­ty study of small pools and mar­gin­al fields which was com­plet­ed in the sec­ond quar­ter this year. The study was the first phase in the larg­er project of get­ting those fields in­to pro­duc­tion.

“Based on the team’s pre­lim­i­nary analy­sis, it was es­ti­mat­ed that some of these fields or small pools could be brought on stream as ear­ly as 2019/2020 if con­di­tions favour their de­vel­op­ment. That is, with time­ly in­vest­ment de­ci­sions and ap­provals, more thor­ough field eval­u­a­tion and prompt mo­bil­i­sa­tion, T&T could start re­ceiv­ing gas from se­lect small pools and mar­gin­al fields in the near term.”

Ac­cord­ing to Lo­quan, larg­er, multi­na­tion­al op­er­a­tors of­ten rel­e­gate small pools and mar­gin­al fields on their pri­or­i­ty list be­cause the eco­nom­ics of de­vel­op­ing a field are as­sessed rel­a­tive to oth­er op­por­tu­ni­ties in their in­ter­na­tion­al port­fo­lio.

If more gas can be ex­tract­ed at cheap­er or com­pa­ra­ble costs else­where and de­rive more val­ue, in­vest­ment at­ten­tion will be so di­rect­ed. He said de­spite these chal­lenges, small pools and mar­gin­al fields in Trinidad’s off­shore re­gion lo­cat­ed off the south east and east coasts have greater prob­a­bil­i­ty of be­ing suc­cess­ful­ly de­vel­oped be­cause of their prox­im­i­ty to ex­ist­ing in­fra­struc­ture.

What­ev­er the strat­e­gy, the down­stream pro­duc­ers need the gas and they need it ur­gent­ly.