Natural gas curtailments that have negatively impacted production by downstream LNG and petrochemical plants in Trinidad are mainly because of less investment by upstream producers, not maintenance activity, BP Trinidad and Tobago said Friday.
The statement by BPTT, the largest producer of natural gas in Trinidad and Tobago, is at odds with declarations by Trinidad's National Gas Co., which on Thursday cited maintenance by upstream producers as the reason for curtailments of up to 20% to methanol plants at Point Lisas Industrial Estate and gas liquefaction complex Atlantic LNG.
On Thursday, the gas company said the ongoing tight supply and demand that has impacted the gas industry since 2010 stems from extensive work to upgrade gas infrastructure as well as disruptions in bringing on new wells and infrastructure, resulting in the periodic shutdown of offshore producing assets.
BPTT said maintenance to offshore platforms and other infrastructure "has contributed to the current gas curtailments, however it is not the primary factor."
"The lower production that has resulted in the gas curtailments recently experienced by [Point Lisas Industrial Estate and Atlantic LNG] is primarily a result of a pause in new investment in recent years by upstream producers, including BPTT, due to the culmination of many factors which created an unfavorable investment climate," BPTT said.
The company said the global economic crisis, an unfavorable fiscal environment and expectations by state enterprises that the industry would have an oversupply of gas due to the cancellation of downstream projects "created a lot of uncertainty, which invariably affected investment decisions."
Trinidad and Tobago's government has improved fiscal terms and taken other measures to improve the attractiveness of investment in the sector, "and there is clear evidence that investment is returning," the company said. "It will, however, take time to rebuild upstream capacity."
So far in 2014, natural gas production by the seven gas producers operating in Trinidad and Tobago has averaged 4.1 Bcf/d, according to the energy ministry. Gas utilization has averaged 3.8 Bcf/d.
Audits of Trinidad's gas reserves show a downward movement in proven gas resources from 2002 to 2013, with the country largely unable to replace the gas that has been produced. Last year, the country used 1.45 Tcf of gas and replaced 0.58 Tcf of gas, with the net effect a downward movement of 0.87 Tcf of gas.
In recent years, energy officials have denied the country is running out of gas and said new exploration in deepwater acreage is likely to improve the supply picture.
BPTT said the country must strive to manage a short-term period of supply shortfalls while ensuring the investment climate continues to incentivize the search for and development of oil and gas.
"The issue is not whether there is enough gas, but rather whether T&T has a robust energy policy or road map that focuses on the right structural and commercial terms to ensure it attracts the level of investment necessary to bring those resources into production," the company said.
BPTT operates in 904,000 acres off Trinidad's east coast and has 13 offshore platforms and two onshore processing facilities.
