Af­ter be­ing hit with an 85 per cent slide in prof­it for the first quar­ter (Q1) of 2020, Trinidad and To­ba­go NGL Ltd (TTNGL) has re­vealed a prof­it for the sec­ond quar­ter end­ed June 30th 2020 (Q2) of $7.6 mil­lion. This suc­ces­sive quar­ter­ly re­duc­tion in prof­its amount­ed to $20 mil­lion or 72.5 per cent.

More­over, TTNGL’s prof­it of $14.5 mil­lion for its half-year end­ed June 30th 2020 al­so rep­re­sent­ed a large de­cline of 80.2 per cent or $58.9 mil­lion.

In TTNGL’s unau­dit­ed fi­nan­cial state­ments, the Chair­man Con­rad Enill said: “The 2019 nov­el coro­n­avirus dis­ease (COVID-19) pan­dem­ic has rav­aged the world­wide econ­o­my and the re­duced eco­nom­ic ac­tiv­i­ty has re­sult­ed in changes in the en­er­gy sup­ply and de­mand pat­terns in 2020.”

Enill ac­knowl­edged that economies across the world have suf­fered de­clines in gross do­mes­tic prod­uct (GDP) dur­ing the first half of 2020, as com­pared to the pre­vi­ous cor­re­spond­ing pe­ri­od last year.

He con­tin­ued to note that un­cer­tain­ties per­sist across all en­er­gy mar­kets, in­clud­ing liq­uid fu­els, nat­ur­al gas, elec­tric­i­ty, coal, and re­new­ables.

Enill added that crude oil prices av­er­aged 35 per cent low­er than in 2019 and Nat­ur­al Gas Liq­uids (NGL) prices, which cor­re­late strong­ly with crude and re­fined prod­uct prices, were al­so ma­te­ri­al­ly low­er dur­ing the first half of the year.

For the six months to 30 June 2020, Enill said the volatil­i­ty in the en­er­gy com­mod­i­ty mar­kets dri­ven by the im­pact of COVID-19 re­sult­ed in the pre­cip­i­tous de­cline of Mont Belvieu (MB) prod­uct prices, and sig­nif­i­cant­ly im­pact­ed the per­for­mance of the Com­pa­ny’s un­der­ly­ing as­set, Phoenix Park Gas Proces­sors Ltd (PPG­PL).

The NGL Chair­man in­di­cat­ed that record­ed MB prod­uct prices were 44 per cent low­er than the cor­re­spond­ing pe­ri­od in 2019.

He as­sert­ed that the im­pact of the low­er prices was mit­i­gat­ed by high­er price dif­fer­en­tials rec­og­nized dur­ing the year, not­ing “dif­fer­en­tials were 34 per cent than in 2019 and re­flect­ed PPG­PL’s strong com­pet­i­tive po­si­tion in the mar­kets it serves, de­spite the im­pact of COVID-19.”

Enill said that PPG­PL’s strong po­si­tion is fur­ther strength­ened by the con­tin­ued strong de­mand for its prod­ucts, which have re­mained rel­a­tive­ly steady since the on­set of the pan­dem­ic.

Ad­di­tion­al­ly Enill not­ed “the com­pa­ny has ben­e­fit­ed from a slight re­cov­ery in prod­uct prices, which has pos­i­tive­ly im­pact­ed its prof­itabil­i­ty in Q2 2020.”

The TTNGL Chair­man al­so re­marked that the ef­fects of COVID-19 al­so dis­rupt­ed the planned per­for­mance and mar­kets of the petro­chem­i­cal pro­duc­ers at Point Lisas, which trans­lat­ed in­to low­er nat­ur­al gas de­mand and low­er gas vol­umes through the PPG­PL fa­cil­i­ty for pro­cess­ing.

How­ev­er, Enill added: “Pos­i­tive­ly, NGL con­tent in the gas stream was 6 per cent high­er than in 2019, and was a re­sult of con­tin­ued ef­forts by NGC to de­liv­er high­er NGL con­tent gas streams to Point Lisas In­dus­tri­al Es­tate.”

Ac­cord­ing to Enill, NGL pro­duc­tion to June 2020 was 10 per cent low­er than in 2019 and PPG­PL con­tin­ued to main­tain high op­er­at­ing avail­abil­i­ty (over 99 per cent), and has sus­tained its fo­cus on pru­dent cost and cash man­age­ment.

Fol­low­ing the ac­qui­si­tion of the NGL liq­uids mar­ket­ing as­sets of Twin Ea­gle Liq­uids Mar­ket­ing LLC in Feb­ru­ary 2020, PPG­PL cre­at­ed a sub­sidiary—Phoenix Park En­er­gy Hold­ings (PPEH) to own and op­er­ate the as­sets ac­quired from Twin Ea­gle.

Enill ex­pressed: “Since start-up, the per­for­mance of PPEH has been pos­i­tive, and earn­ings from this ac­qui­si­tion are ex­pect­ed to im­pact PPG­PL re­sults pos­i­tive­ly in the short term.”

Notwith­stand­ing a chal­leng­ing mar­ket and op­er­at­ing en­vi­ron­ment, Enill posit­ed that the TTNGL Board of Di­rec­tors re­mains cau­tious­ly op­ti­mistic about the fu­ture and its in­vest­ment in PPG­PL.