Cur­tis Williams

cur­tis.williams@guardian.co.tt

T&T’s nat­ur­al gas pro­duc­tion plum­met­ed in June to its low­est lev­el since 2016 av­er­ag­ing a mere 3.110 bil­lion stan­dard cu­bic feet per day (Bscf/D).

The in­for­ma­tion is con­tained in the lat­est re­port on the en­er­gy sec­tor which was re­leased by the Min­istry of En­er­gy and En­er­gy In­dus­tries on Au­gust 11th, one day af­ter the gen­er­al elec­tions.

Ac­cord­ing to the fig­ures from the Min­istry, nat­ur­al gas pro­duc­tion de­clined from 3.5 Bscf/D to 3.1 Bscf/D or a fall of 400 mil­lion stan­dard cu­bic feet per day (mm­scf/d).

To put it in­to per­spec­tive the 400 mm­scf/d is equiv­a­lent to all the gas used to pow­er the en­tire coun­try. It is enough gas to pow­er At­lantic LNG’s Train 1 pri­or to its de­bot­tle­neck­ing. It is al­so enough gas to run four methanol plants and an am­mo­nia plant.

This rep­re­sents a sig­nif­i­cant fall from pro­duc­tion in 2018 which av­er­aged in June 2018 3.81 Bscf/D and a year ago which was 3.45 Bscf/D.

Re­cent­ly the Busi­ness Guardian re­port­ed that the up­stream com­pa­nies (BPTT,Shell,EOG, BHP) had been asked by the Na­tion­al Gas Com­pa­ny (NGC) to re­duce their dai­ly con­tract­ed quan­ti­ties be­cause there were a num­ber of petro­chem­i­cal plants that had shut down be­cause the col­lapse of glob­al prices for methanol and am­mo­nia along while the rel­a­tive­ly high prices for gas be­ing de­mand­ed by the NGC had made them un­com­pet­i­tive.

The NGC is the ag­gre­ga­tor so it buys nat­ur­al gas from the up­stream com­pa­nies and then sells it on­to the down­stream op­er­a­tors at a prof­it.

Ac­cord­ing to num­bers from the Min­istry of En­er­gy BPTT was the ma­jor con­trib­u­tor to the de­cline in the nat­ur­al gas pro­duc­tion.

The Min­istry re­port showed that BPTT’s pro­duc­tion in June was 1.738 Bscf/D as op­posed to 1.994 in Jan­u­ary. That is a fall of more than 250 mm­scf/d. EOG’s pro­duc­tion al­so fell by more than a quar­ter or just un­der 100 mm­scf/d.

In terms of us­age LNG and methanol pro­duc­tion were the worst af­fect­ed.

Methanol util­i­sa­tion of nat­ur­al gas fell from 577 mm­scf/d to 375mm­scf/d or a fall of more than 200mm­scf/d. This is a 35 per­cent fall in util­i­sa­tion and prob­a­bly re­flec­tive of the clo­sure of plants.

The news is al­so not good for LNG us­age which al­so fell dra­mat­i­cal­ly from a high of 2.06 Bscf/D in April to 1.71 Bsc.f/D in June.

These num­bers are all go­ing to hurt gov­ern­ment rev­enues since it means low­er pro­duc­tion of LNG and petro­chem­i­cals and in the petro­chem­i­cal con­text, no tax­es on prof­its from plants that are un­der sig­nif­i­cant pres­sure. It will hurt rev­enue from gas pro­duc­tion since the roy­al­ty is on vol­ume and the low­er the vol­ume the less mon­ey gov­ern­ment gets.

There is how­ev­er some bet­ter news as Her­itage Pe­tro­le­um led a 5000 bar­rels of oil per day (bo/d) in­crease in crude pro­duc­tion in June when com­pared to May this year. In June, crude pro­duc­tion av­er­aged 56,316 bo/d com­pared to 51,218 bo/d in May.

The fig­ure how­ev­er rep­re­sents the con­tin­ued de­cline in pro­duc­tion from the high in the 1970s of over 250,000 bo/d down to the rel­a­tive­ly mi­nus­cule pro­duc­tion to­day.