BP Trinidad and Tobago President Norman Christie on Thursday urged the country's government to improve incentives for energy companies to develop natural gas projects, or risk losing billions of investment dollars.
Addressing BPTT's Statistical Review forum in Port of Spain, Christie warned that T&T government efforts to update the nation's gas master plan "must result in clear policy decisions regarding matters such as gas allocation and price and must incentivize upstream investments in an increasingly competitive environment."
"Failure to bring clarity to these matters quickly will result in a sharp decline in investments, which will lead to a repeat of the circumstances that have materially contributed to the natural gas supply and demand imbalance that we are currently experiencing; only it will be worse," he said.
Christie said the prolonged gas supply shortfalls Trinidad has experienced in recent years were due in part to pauses in investment by upstream operators. The shortfalls have hurt production at the Atlantic LNG gas liquefaction facility and at petrochemical plants.
Christie said his company's plans for upcoming major gas projects, including the Angelin gas field off Trinidad's east coast, will depend on how quickly the government acts to clarify the policies.
"The next phase of planned major developments, starting with Angelin, are still not sanctioned and will not be sanctioned unless policy decisions properly recognize the context in which we are operating," he said.
"Said another way, no sensible business person recognizing the context we are in is going to invest approximately $5 billion over the next three to four years into natural gas projects without knowing where the gas is going to go and under what pricing mechanism," he added.
If approved, installation work at Angelin is expected to follow development of BPTT's $2.1 billion offshore Juniper gas project, about 50 miles off the southeast coast of Trinidad.
Christie said BP "worked hard and against significant odds" to develop the Juniper gas field and onshore compression project, which will start production in 2017.
Juniper, with a production capacity of about 590,000 Mcf/d, is considered crucial to helping ease the shortfalls and satisfy gas contract obligations beyond 2017.
Christie called on the government to ensure "that all segments of the natural gas value chain are properly incentivized -- and by this I mean that all players in the value chain should realize returns that are commensurate with their level of risk."
BPTT is the largest producer of gas in Trinidad and Tobago and a major stakeholder in all four trains of Atlantic LNG.
A copy of the speech was released to the media.
