Gas Development And Pricing In Trinidad And Tobago

Abstract

Abstract The natural gas industry of Trinidad and Tobago is separated into the upstream gas producers and the downstream which includes the direct gas based industries and the gas transmission company. Past financial data was collected for both the upstream and the downstream. A detailed computer model was constructed and by its use financial projections were extended for this paper to the year 2015. for both the upstream and downstream. The significance of the installation of a world-scale liquefied natural gas plant on Government revenue is also discussed. The paper presents relationships found over the period between gas price, profit and taxes and attempts to analyze these relationships. Sensitivities are done to determine the effect of several factors on the gas producers' profitability. The paper estimates the total revenue benefits to the Government of Trinidad and Tobago. in particular those derived from the LNG plant and concludes that the timing and size of all escalation factors on gas prices, both upstream and downstream, should be kept under constant review. Introduction Natural gas in Trinidad and Tobago occurs under three categories :- as dry gas reservoirs such as those off the North Coast; as wet gas in gas condensate reservoirs such as those in the Teak, Cassia and Kiskidee Fields in the East Coast marine area; and as dissolved gas in the crude oil and produced as associated gas" during oil producing operations. The gas is of very high quality, containing over 92% methane and negligible hydrogen sulphide and is therefore considered a sweet gas. It is estimated that the proven non-associated natural gas reserves are in the order of 8.7 (TCF) trillion cubic feet of which 70% belong to the East Coast marine area. At the present rate of production, the expected life of the gas reserves are in the order of 45 years. The major gas fields of Trinidad and Tobago and main gas lines are shown in Figure 1. At present, the main supplier of high pressure natural gas is Amoco Trinidad Oil Company from its offshore wells in the Teak, Cassia, Immortelle and Flamboyant fields located off the East Coast of Trinidad. Other suppliers include Enron Gas and Oil Limited and Trintomar. The National Gas Company of Trinidad and Tobago Limited (NGC) owns and operates two (2) offshore platform for compressing "low pressure associated gas". This company purchases and sells natural gas, and transports and distributes it to several consumers throughout the country. NGC's responsibilities include ensuring security of natural gas supplies to downstream consumers, pricing of natural gas, investigating the feasibility of gas related projects, and the implementation of such projects. Natural gas from the fields offshore is transported via a 24 inch and a 30 inch line to the Phoenix Park Gas Processors Limited (PPGPL) plant at Point Lisas, where the heavier gases mainly propane and butane are extracted for exportation, while the natural gasolines are utilized in Petrotrin's refining operations. The methane rich gas is then distributed to various consumers across the country where it is used as a feed stock in the petrochemical industry, as fuel for power generation and in heavy and light manufacturing industries. Natural gas supply and utilization charts are shown in Figure 2. The bringing on stream of a liquid natural gas (LNG) plant in 1998 will increase the gas for the downstream by 40%. New fields will be developed such as Amoco's East Mayaro field and British Gas/Texaco's Dolphin field to meet the additional requirement. The gas industry contributes to the economy through taxes, dividends, foreign exchange earnings, and employment opportunities. By conservation and prudent management, natural gas resources will undoubtedly play a major role in the nation's economy for many years to come.