FocusTrinidad gas cuts may last until 2014, some doubt the cause

09 October 2012 18:32  [Source: ICIS news]

By Lane Kelley

HOUSTON (ICIS)--The possibility that natural gas curtailments in Trinidad may last until early 2014 has raised doubts in the methanol sector about the cause of the cutbacks, sources said on Tuesday.

Some are skeptical of the explanation that the cutbacks stem from work being done on offshore platforms operated by BP and BG. The skeptics wonder if there is a developing natural gas shortage on the tiny Caribbean island.

“In 2009 they said they had 20 years of gas supply,” a US source said, adding that extending the curtailments another year or so raises questions about Trinidad’s gas supply. “That kind of blows that explanation out of the water.”

Trinidad’s energy minister, Kevin Ramnarine, said in a speech earlier this month that the island’s gas supply faces a challenge from the platform work but not a shortage.  Ramnarine said the platform work would continue until early 2014.

“This does not mean that we are running out of gas,” Ramnarine said, explaining that the maintenance was being done for the purposes of safety and reliability.

Work on two platforms - one owned by BP, the other by BG - in September and October puts 17% of the country’s gas supply offline, Ramnarine said.

BP and BG did not immediately return calls seeking further explanation.

BP’s gas production in Trinidad last year fell by 15%, according to a newspaper story published by the Trinidad Guardian in June.

Norman Christie, president of BP Trinidad and Tobago (BPTT), was quoted in the story as saying there were two reasons for the decline - maintenance work on the platforms, and a reduction in so-called “cushion gas” that BP kept for tight supply situations.

Christie said BPTT reduced those supplies because of competition from lower-priced gas in the US and higher production costs in Trinidad.

Methanol production in Trinidad has declined each year since the curtailments began - down by 3% in 2010, by less than 1% in 2011, and by 9% in the first six months this year, according to data from the country’s Central Bank.

In September, a stock analyst said the US will have enough methanol plants operating in five years to stop importing most of its material from Trinidad and South America. Trinidad accounted for 69% of US methanol imports in 2011.

Another US methanol source compared the ongoing gas curtailments in Trinidad to Methanex’s problem in finding enough gas to run methanol plants in South America.

“Sounds like Chile all over again,” the source said of the Trinidad cutbacks.

Methanex plans to move one of its idle plants from Chile to Louisiana next year and may decide to move another one in early 2013.

However, there are methanol sources who believe Trinidad’s gas problems will be solved when the maintenance work is done.

A source close to a methanol producer at the Point Lisas complex disagreed with talk of a real gas shortage in Trinidad. The source said work on a few more platforms would require outages that have been scheduled through early 2014.

“So the curtailments referred to are due to offshore work and not a fundamental gas shortage,” the source said.


By: Lane Kelley
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