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ENERGY Caribbean Yearbook (2013-14)

caribbean gas market

caribbean gas market Energy issues TT must get moving Is Trinidad and Tobago moving fast enough to secure the emerging market for natural gas in the Caribbean? Many energy analysts think not. At the time of writing, Gasfin Development SA, the Luxembourgbased company leading the way in trying to push the country into making sales contracts with Caribbean electricity utilities, had still not been able to line up an assured gas supply with which to approach potential customers. Only about 70 million cubic feet a day (mmcfd) is required for the first train of about 500,000 tonnes a year that Gasfin would like to see sited at the Labidco industrial estate at La Brea to liquefy gas for regional export. Perhaps frustrated by Trinidad and Tobago’s apparent slothfulness, Gasfin’s CEO Roland Fisher has hedged his bets by also seeking permission from the US Department of Energy to export low-priced shale gas from a plant he wants to build in Louisiana. He was quickly given the green light, though he now has to clear his 1.5 million tonne per year complex, which he wants to build in phases, with the Albert G. Nahas (courtesy Cheniere) Companie 2020, so Trinidad and Tobago still has the Federal Energy Regulatory Commission. Gasfin does not expect to be ready to export LNG from the US much before opportunity to get in first and capture the market before Gasfin Development USA decides to target that customer base. One piece of luck for the La Brea project, which Fisher is calling Project Constantine, is that his US company, at least for now, will be permitted to export only to countries with which the US has a free trade agreement. Puerto Rico and the US Virgin Islands (which are part of the US anyway) and the Dominican Republic are the only parts of the insular Caribbean that qualify, so Fisher will be limited to seeking markets there. Countries This leaves 21 other potential markets in the Caribbean archipelago to which La Brea LNG could theoretically sell gas. Even Guyana, Suriname and French Guiana, the first two of which are members of Caricom, could be potential targets. Gasfin Development USA is not the only company gunning for the Caribbean market: Pacific Rubiales in Colombia is also planning a small LNG export project. As a competitor, Colombia is an unknown quantity. But even if Fisher chose not to try and sell in the Caribbean, and others such as Cheniere did, Trinidad and Tobago might very well hold its own. Albert G. Nahas, Cheniere’s vice president for international government affairs, believes that “Trinidad and Tobago is perfectly capable of competing in the Caribbean gas market. After all, gas will still be cheaper in TT than in most of the rest of the world, except the US.” Fisher himself has told this YEARBOOK that he would prefer to supply Caribbean markets that materialise from Trinidad and Tobago rather than the US. La Brea LNG will open markets near to home for Trinidad and Tobago LNG. But it could also present the country with a unique value-chain opportunity through the National Gas Company or its subsidiary, the National Energy Corporation, not only in the LNG train itself but in the ships needed to transport the gas and the re-gasification facilities at the receiving end. At the moment, NGC holds a 10% share in Atlantic’s train one and 11.1% in train four, which gives it a quota of 88 mmcfd. Until recently, this was sold internationally on its behalf. It has recently taken back 30 mmcfd to market on its own account, thus giving it some experience in these matters prior to any involvement in La Brea LNG. Gasfin has been working closely with EdF, the electricity company in Martinique and Guadeloupe, with a view to supplying 200,000 tonnes of LNG to each French department to run the gas turbines both are installing. This would provide a market for 80% of the capacity of La Brea train one, but no deal can be struck until a gas supply from NGC is pinned down. Roland Fisher (courtesy Gasfin) 10

Energy issues the green agenda It will take a long time to replace fossil fuels The “green energy movement” is slowly gaining momentum in the Caribbean, reflected for renewable energy and efficient use of fossil fuel energy. These initiatives are dealt with elsewhere in this YEARBOOK, in the context of the Caricom Energy Policy. But it’s going to be a hard slog. Oil will not willingly surrender its position in the growing enthusiasm Compani as the region’s leading energy source. The International Energy Agency (IEA), which looks after the interests of western industrialised countries, predicts that fossil fuels “will still account for 80-85% of overall world energy consumption by 2030.” And coal, the least green fossil fuel, is making something of a comeback, and could even reach energy use parity with oil before the end of the present decade. Gas, the least emissions-intensive of the three, makes the strongest claim. Even the Caricom Energy Policy acknowledges that “compared with crude oil, natural gas is a less expensive and cleaner fossil fuel which can be used not only to generate electricity efficiently, by deploying advanced technologies, but also as a feedstock for the manufacture of petrochemical products, fuel for the manufacturing sector and for vehicular transportation.” Countries The policy document urges Caricom members to “satisfy their demand for natural gas from the resources Roger Salloum (courtesy Green Building Council) “Fossil fuels will still account for 80-85% of overall world energy consumption in 2030” of those member states with such resources.” The only Caricom state with exportable gas resources, Trinidad and Tobago, can take that as an endorsement of its role in the emerging Caricom market for LNG and possibly CNG, and rejection of the deals US exporters will want to do with Caricom customers. With significant take-up of RE some decades away, most energy analysts see natural gas as a “bridging fuel” between oil era and RE. Other initiatives to move the “green agenda” forward are slowly taking shape. Trinidad and Tobago, a late convert to energy sustainability, even has a Green Building Council, established in September 2010, to preach the virtues of green buildings. The Council’s president, Roger Salloum, says its mission is to “transform the way Trinidad and Tobago’s buildings are built and communities are designed, built and operated.” Salloum claims that “green buildings can increase worker productivity” by being “more comfortable and healthier for the occupants, as compared with conventionally constructed and maintained buildings.” Greening, he suggests, includes a range of very simple practical steps such as installing energy-saving bulbs, recycling plastics and other materials, and collecting rain water for wetting plants and flushing toilets. The energy ministry in Port of Spain wants citizens to set airconditioning units a few degrees warmer, turn off electronic devices when not in use, and unplug bedside lamps, TV sets, video games, computers etc. until they are needed. Thirteen years ago, Trinidad and Tobago established a Green Fund, financed through an annual tax of 0.1% on gross company sales. It now has well over TT$2.5 billion available. NGOs and other groups (but not corporations) that promote “reforestation, remediation, environmental education and public awareness of environmental issues” can apply to it for assistance. energycaribbean YEARBOOK 2013/14 11

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