Near record global prices for ammonia and high methanol prices have led to companies on the Point Lisas Industrial Estate operating at capacity and has resulted in greater profits for both the National Gas Company Limited (NGC) and Phoenix Park Gas Processors Limited (PPGPL).
Last week PPGPL released its audited financial statement for the year ended December 31, 2021 in which the company recorded an after-tax profit of TT $512.8 million, which represents a 373.6 per cent increase over the 2020 results of TT$6.4 million (excluding 2021: impairment gain of TT$302.1million; 2020: impairment loss of TT$38.1 million).
Earnings per share have also increased from the 2020 TT$0.04 to TT$3.31 at end of 2021.
It was also noted that PPGPL recorded a profit after tax of TT$545.0 million at year end 2021, a 366.6 per cent improvement when compared to TT$116.8 million for the corresponding period of 2020.
This strong performance stemmed from higher recognised Mont Belvieu NGL product prices, which were 112.3 per cent greater than 2020, and improved NGL production from the higher margin gas processing segment.
Additionally, NGL production from gas processing was 11.8 per cent higher than 2020 and was driven by a 7.7 per cent increase in gas volumes for processing (2021: 1,141 million standard cubic feet per day), the statement said.
A five per cent increase in the NGL content of the gas stream was also recorded
PPGPL’s President Dominic Rampersad said there was an increase in the gas available for processing by PPGPL and this was a direct result of the Petrochemical plants operating at higher output.
He explained, “What I can say is what we have seen happening on the estate, because ammonia prices are so high, methanol prices are high, it is causing those companies that may have been operating at less than full capacity, they have remped up capacity. So the demand on the estate has actually ramped up.
“What we have also been seeing on the LNG side is that they tend to fluctuate because of their maintenance and different things, but I don’t think what we are seeing on the estate is a function of what is happening at the LNG, I think it is a function of what is happening downstream.”
He said the output from the Petrochemical sector has returned to pre-COVID days.
“The percentage has gone up from my perspective, it has really gone back to what it was pre-COVID, remember one of the other things as well that has caused the increase in our volumes is the liquid content in the gas, that we have seen as well.”
Rampersad also said part of last year’s success is the strategy of the NGC to have more liquid rich gas come to the estate.
“What we have seen is more BHP gas coming into the system, what we’ve seen is less Shell gas coming into the system from the east coast and more bpTT gas has been coming into the system consistent with what I understand to be contractual obligations to the NGC which I don’t know the details of.”
He was asked whether from PPGL’s perspective it makes more sense to have more natural gas sent to the Point Lisas Industrial Estate than to LNG because his company gets more revenue from processing the gas rich in liquids rather than what it gets from natural gas liquids as a by product of the LNG process Rampersad said simply ‘yes.”
“The long and short answer is simply yes.” He told the Sunday Business Guardian.
Pushed further if that meant the NGC’s loss of quarter billion dollars on an attempt to save train 1 rather than focus on the Estate was a bad strategic move Rampersad was guarded.
“To be honest, I did not, I have no, I am not privy to the assessment done by the NGC into Train 1, so I can’t give you an honest answer to that. I really was not privy to that information, so I don’t know the economics of what was done.” Rampersad told the SBG.
He added; “”From a PPGL perspective the more gas that flows to Pt Lisas, we benefit more from that, given our contractual arrangements with NGC and our contractual arrangements with Atlantic. So the more gas that comes through the gas processing at the inlet benefits us more than, even if you were to send more gas to Atlantic, the NGLs that come from Atlantic, our profit that we earn from those NGLs will be less than we get from our gas.”