Trinidad will grant no subsidies for new projects – minister

27 March 2012 20:03  [Source: ICIS news]

The flag of TrinidadHOUSTON (ICIS)--The proposed $5.3bn (€4.0bn) gas-to-chemicals project in Trinidad will receive no government subsidies, the country’s energy ministry said on Tuesday.

A spokeswoman for Energy Minister Kevin Ramanarine confirmed that he told the country’s Parliament late last week that no subsidy had been provided by the government for the proposed methanol projects on the Caribbean island.

In early February, Ramnarine and the government began negotiations with Saudi Basic Industries Corp (SABIC) and China’s state-owned Sinopec on a proposed methanol-to-olefins (MTO) and methanol-to-petrochemicals (MTP) project at the Point Lisas Industrial Estate.

Newspaper editorials and methanol sources criticised the SABIC/Sinopec proposal for requiring a huge subsidy from the government.

In early February, the size of the natural gas subsidy that the SABIC/Sinopec consortium was seeking touched off a political debate in Trinidad.

Ramnarine was quoted in a newspaper saying SABIC wanted a price 36% below the government’s cost. A US market source said the gas price SABIC wanted is below $1/MMBtu.

Trinidad newspapers over the weekend quoted Ramanarine saying that bidders had offered gas prices ranging from 36-53% lower than the state-owned National Gas Corp (NGC) price.

Ramnarine told Parliament he did not know the price and that it would be negotiated by NGC and the Ministry of Energy, according to a story in Trinidad and Tobago’s Newsday.

A methanol source said SABIC/Sinopec’s proposal could not work with natural gas prices above $2.50/MMBtu.

Ramnarine named all of the parties in Parliament that submitted bids on the projects, according to Trinidad newspapers.

Other bidders on the MTP project besides SABIC/Sinopec included Texas-based acetyls producer Celanese; Methanol Holdings Trinidad Ltd (MHTL); Integrated Chemicals Co Ltd (ICCL) of the USA, in partnership with Mitsubishi of Japan and Neal and Massy of Trinidad and Tobago; and Saudi International Petrochemical Co, Mitsui & Co and Daicel Chemical Industries of Japan, according to Newsday.

Bidders who submitted proposals for the MTO project included SABIC and Sinopec; Vinmar Projects Ltd USA with US-based UOP and Bourse Securities of Trinidad and Tobago; and SYN Energy Technology of Dalian, China, according to Newsday.

($1 = €0.75)

By: Lane Kelley
+1 713 525 2653

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