The state-owned Na­tion­al Gas Com­pa­ny of T&T (NGC) con­tin­ues to suf­fer heavy fi­nan­cial loss­es in­to 2020 as it has record­ed a loss af­ter tax of $316.2 mil­lion for the first six months, ac­cord­ing to its chair­man’s re­port for the pe­ri­od end­ed June 2020.

In an in­ter­view with Guardian Me­dia on Sat­ur­day, Con­rad Enill, chair­man of NGC at­trib­uted these loss­es to volatile com­mod­i­ty prices on in­ter­na­tion­al mar­kets, im­pair­ment pro­vi­sions on as­sets as­so­ci­at­ed with changes in mar­ket out­look, and non-pay­ment for gas sales by NGC’s largest cus­tomer which is the T&T Elec­tric­i­ty Com­mis­sion (T&TEC).

Enill said NGC’s loss did not be­gin in 2020 but there was a short­fall in 2019 as well.

“Last year we ba­si­cal­ly found our­selves with a $2 bil­lion change but this year it con­tin­ued be­cause of the con­di­tions,” he said.

Enill said de­spite the loss in the first half of 2020 and in 2019, he re­mains op­ti­mistic about the fu­ture of the com­pa­ny.

“I ex­pect these con­di­tions to oc­cur for the next 12 to 18 months. We have al­ready start­ed to see changes in the mar­ket price for am­mo­nia as it has start­ed to re­cov­er a bit. There­fore, I ex­pect that maybe at the be­gin­ning of the first quar­ter in 2021 we would start to see a change in the pric­ing struc­ture and that is go­ing to ben­e­fit that in a par­tic­u­lar way. In the short and medi­um terms, the mar­ket will start to re­bal­ance it­self and that would change the pric­ing struc­ture.”

The $316.2 mil­lion rep­re­sents a de­crease of 296 per cent or $477.3 mil­lion from the six-month prof­it for 2019 of $161.1 mil­lion. Rev­enues de­creased by 22.9 per cent or 1.74 bil­lion from $7.61 bil­lion for the six months end­ed June 2019 to $5.87 bil­lion for the six months to June 2020, the chair­man’s re­port stat­ed.

The re­port at­trib­uted loss­es to mar­gins con­tin­u­ing to be af­fect­ed by the volatil­i­ty of the com­mod­i­ty mar­kets with prices de­creas­ing by 33 per cent, nine per cent and 34 per cent for methanol, am­mo­nia and nat­ur­al gas liq­uids re­spec­tive­ly in the re­port­ing pe­ri­od.

The re­port al­so said that the down­stream sec­tor has been sig­nif­i­cant­ly chal­lenged in the new en­vi­ron­ment and com­pa­nies have re­spond­ed by us­ing this pe­ri­od to cur­tail op­er­a­tions, ex­e­cute turn­arounds and pre­pare for mar­ket re­cov­ery.

NGC said they would con­tin­ue to work with all stake­hold­ers to cre­ate a sus­tain­able in­dus­try both in the short term and longer-term re­cov­ery.

The re­port al­so not­ed that in 2020, NGC signed a Frame­work agree­ment with Touch­stone Ex­plo­ration Inc and Her­itage Pe­tro­le­um Com­pa­ny Ltd for the de­vel­op­ment, sale and pur­chase of all nat­ur­al gas and nat­ur­al gas liq­uids pro­duced from the Or­toire Block and are now in de­tailed dis­cus­sions for the ex­e­cu­tion of a ful­ly termed gas sup­ply con­tract.

The NGC al­so ex­e­cut­ed a new gas sup­ply with BHP for the sup­ply of gas from Block 3(a) which is un­der de­vel­op­ment with the first gas ex­pect­ed in the fourth quar­ter of 2021.

The group has al­so con­tin­ued with its in­ter­na­tion­al­i­sa­tion thrust and ac­quired the NGL mar­ket­ing as­sets of Twin Ea­gle Liq­uids Mar­ket­ing LLC and in­cor­po­rat­ed a Com­pa­ny Phoenix Park En­er­gy Hold­ings (PPEH) to own and op­er­ate the as­sets.

NGC’s chair­man re­port con­clud­ed that de­spite chal­lenges faced, the group re­mains fo­cused on the ex­e­cu­tion of its cur­rent strat­e­gy of be­ing an in­te­grat­ed gas play­er par­tic­i­pat­ing in all stages of the gas val­ue chain. NGC al­so promised to con­tin­ue in­vest­ments in tech­nol­o­gy to sup­port the trans­for­ma­tion of their busi­ness.

Ac­cord­ing to Enill, “De­spite the cur­rent COVID-19 pan­dem­ic and as­so­ci­at­ed chal­lenges, the NGC Group has been able to en­sure busi­ness con­ti­nu­ity and keep crit­i­cal op­er­a­tors re­quired for the func­tion­ing of the na­tion­al econ­o­my. This was pos­si­ble due to the group’s in­vest­ment in var­i­ous tech­nolo­gies that have sup­port­ed work-from-home ac­tiv­i­ties in ac­cor­dance with the Min­istry of Health pro­to­cols.”

Lash­ley: NGC Group’s fi­nan­cial per­for­mance would not di­rect­ly im­pact NEL

In­grid Lash­ley, chair­man of the Na­tion­al En­ter­pris­es Ltd (NEL) told Guardian Me­dia that they do not have in­vest­ments in the NGC group as a whole, but on­ly in its sub­sidiaries and in this case it would be NGC NGL.

NEL is an in­vest­ment man­age­ment com­pa­ny that re­ceives div­i­dends from com­pa­nies they have in­vest­ed in and NEL would be im­pact­ed if these com­pa­nies are un­able to pay their div­i­dends. At this mo­ment, NGC NGL con­tin­ues to pay div­i­dends to the NEL, she not­ed.

So the NGC Group’s fi­nan­cial per­for­mance as a whole would not di­rect­ly im­pact NEL.

For the fis­cal year end­ed March 31, 2020, NEL record­ed a loss of $327.5 mil­lion com­pared to a prof­it of $12.5 mil­lion in the com­pa­ra­ble pe­ri­od last year.

In the com­pa­ny’s fi­nan­cial state­ments, Lash­ley said the loss was large­ly due to the de­cline in the val­ue of NEL’s in­vest­ment in Telecom­mu­ni­ca­tion Ser­vices of T&T Ltd (TSTT) of $127.5 mil­lion and NGC NGL $175.3 mil­lion.