28 June 2012 22:25 [Source: ICIS news]
HOUSTON (ICIS)--A huge gas-to-chemicals project in Trinidad and Tobago proposed by SABIC and Sinopec appeared to be in doubt this week as talks over a natural gas contract faltered, sources said on Thursday.
The proposed $5.3bn (€4.2bn) project called for 225m cubic feet/day of natural gas.
In early February, Trinidad’s Minister of Energy, Kevin Ramnarine, and the government began negotiations with Saudi Basic Industries Corp (SABIC) and China’s state-owned Sinopec on the proposed methanol-to-olefins and methanol-to-petrochemicals project at the Point Lisas Industrial Estate.
But a source close to the negotiations said the consortium had doubts whether the country could provide enough gas for the project.
A political debate erupted when the deal was announced in February over the price that would be paid for the gas, but the sticking point in negotiations apparently became whether there is actually enough gas available in Trinidad to supply the project.
The Trinidad Guardian newspaper on Thursday cited unnamed sources at National Gas Co (NGC) saying SABIC and Sinopec had asked to see data on Trinidad’s gas reserves to determine whether the country could support the project.
Calls and emails to NGC and Ramnarine were not returned immediately.
Persistent natural gas curtailments to methanol, ammonia and other petrochemical producers there during the past year have cut into Trinidad’s output.
Trinidad’s methanol production dropped 8% in the first quarter this year compared with the same period in 2011, according to data released by the country’s central bank. Methanol exports fell 4.5%.
Methanex Chairman Bruce Aitken in May discounted the chances of the SABIC/Sinopec project because methanol producers in Trinidad could not get enough gas to run their plants.
Meanwhile, the US has been gaining in popularity this year as a location for methanol plants, because of plentiful and cheap supplies of natural gas in the country.
Trinidad supplies roughly 70% of all US methanol imports, but that percentage will probably be reduced significantly in the next few years because of a restarted unit in Texas and plans for restarting or building new plants in the US announced this year.
($1 = €0.80)
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