News
An aerial shot of Atlantic’s liquefied natural gas facility in Point Fortin. – Photo courtesy Atlantic
NATURAL gas production dipped below 2 billion cubic feet per day (bcf/d) in July, the lowest the production has been since 2002.
But the Ministry of Energy said production levels had bounced back in July and August.
In a press release, the ministry responded to a story by oil and gas publication Oil Now, which said natural gas production was the lowest in 22 years in July.
The report said Trinidad and Tobago’s three major gas producers, bpTT, Shell and Woodside, contributed to what Oil Now said was a 24 per cent decline in production compared to the January-May average of about 2.58 bcf/d.
The report said Shell’s production declined seven per cent from May to 559 million cubic feet per day (mcf/d) in June. The TT chapter of the British oil and gas giant, bpTT, declined by 21 per cent to 937 mcf/d. Woodside’s production whittled down to 21 mcf/d from 312 mcf/d.
In June 2023, the total production of natural gas amounted to 2.5 bcf/d, with bpTT producing 1.16 bcf/d, Shell producing 758 bcf/d and Woodside producing 333 bcf/d.
The ministry said the production was impacted by maintenance activities by the three major upstream gas producers. Where the Oil Now publication said there was a 24 per cent reduction, the ministry marked it at 22 per cent.
Energy ministry – it’s all part of the plan
The ministry said the activities that led to the decline in production were planned a year in advance and were essential components of compliance with government regulations.
“Among these activities were turnarounds, which are proactive measures to ensure the safety of all personnel on the respective facilities, as well as the optimisation of processes aimed toward improving production and overall efficiency.”
The production decreases, which could have affected the value chain, were also planned for through the planned turnarounds of Train IV at Atlantic LNG, Point Lisas Nitrogen Ltd and the urea plant at Nutrien Ltd in June.
A “turnaround” is a scheduled event where an entire process unit is taken offline for maintenance, inspection and upgrades. To safely conduct these exercises would mean stopping production completely.
Along with the shutdown in plants, it would also make sense to have planned shutdowns of downstream plants because the reduction in the gas supply would mean that the plants may not have enough gas to operate.
Therefore, downstream plants schedule maintenance exercises to coincide with the turnarounds done by upstream suppliers. The ministry’s release said production bounced back in July, increasing to 2.3 bcf/d and further increased to 2.7 bcf/d in August. The ministry projected natural gas production for the fourth quarter of the year to average 2.5 bcf/d.
Economist–energy revenues higher than pre-pandemic levels
Despite having lower revenues for the first three quarters of 2024 as compared to last year and having consistently declining production levels, economist Valmikki Arjoon said revenues from the energy sector have exceeded pre-pandemic levels. He said this could only have been a result of better deals being negotiated on energy prices, giving TT more buck for its bang.
Arjoon said energy revenues for the first three quarters of this year are about $10.2 billion, $10.8 billion lower than the same period last year.
“This, of course, is due to lower gas prices on the international market relative to the last fiscal year, more so the first quarter of fiscal 2022/2023,” he said.
But he noted that energy revenues for the nine months of the fiscal year were higher than revenues for the same period in fiscal 2017/2018 and 2018/2019 by $1.2 billion and $2.4 billion, respectively.
“This higher revenue is likely due to the renegotiated higher gas prices that we now receive which is a weighted average of global prices besides Henry Hub, such as the Japan Korea Marker (JKM), Dutch TTF and the UK NBP,” he said.
He said the latter three prices tend to be higher than the Henry Hub and therefore would adjust the price received upward, helping TT to earn more revenue despite production being lower than pre-pandemic years.
