Monetizing Gas Reserves: Trinidad and Tobago's Approach

Abstract

The petroleum sector of the Republic of Trinidad and Tobago has made substantial contribution to its economy over the last 90 years. The major contribution during the period 1908 to 1995, came from oil production. Starting in 1996, there were major developments in the gas sector to the extent that revenues from gas production in 2000, exceed that from oil production. This paper reviews the natural gas industry and summarises the factors that contributed to the successful monetization of stranded gas reserves. The Government of the Republic of Trinidad and Tobago (GORTT) have undertaken many initiatives that have promoted upstream exploration and production activities both onshore and offshore. As a result, a number of investors were encouraged to explore for and develop gas reserves resulting in the proved gas reserves increasing to 22 Tcf in 2000. Policies were also adopted which facilitated the development of a range of petrochemical and other gas based industries. These encouraged investments in the methanol, fertilizer, iron and steel industries. More significantly, Train 1 of a liquefied natural gas plant was commissioned in 1999, and the first shipment was exported in April 1999. This plant is being expanded, with the construction of Trains 2 and 3 presently in progress. Consideration is being given to Trains 4 and 5. The coming onstream of Trains 2 and 3, together with an additional ammonia plant and a methanol plant, will reduce the reserves to production ratio from 37 years at January 2000 to 21 years by December 2003, until more reserves are proved. Future potential projects aimed at sustaining the development in this sector have also been identified. In this regard, additional deep-water acreage will be placed up for bids, and discussions are ongoing for the establishment of an aluminium smelter plant, additional fertilizer plants, an ethylene project and a gas to liquids project. Introduction Natural gas is the fastest growing energy source worldwide1. The growth in demand for natural gas as a fuel has been encouraged by the global concerns for the environment. When it is burned, natural gas releases less CO2, less sulfur dioxide, and less particulate matter to the atmosphere, per unit of energy than liquid hydrocarbons or coal. Trinidad and Tobago's proven natural gas reserves have grown significantly over the last twenty five years, from 4 Tcf in 1975 to 22 Tcf in 2000. Trinidad and Tobago is located at the southern end of the Caribbean archipelagic chain. The twin island state consists of a land mass of 5,131 sq. km (Fig. 1), has a population of 1.3 million, and geologically, it forms part of the South American mainland. Trinidad's location is favourable as it is only 7 miles from South America, 2100 miles to North America, and 4000 miles to Europe. In Trinidad, oil and gas are found in the south of the island, and offshore on the southeast and southwest coasts. Non-associated natural gas is found off the north and southeast coasts2,3,4. The first oil well was drilled in 1866 in South Trinidad. In 1908, commercial oil production began, and for the period 1908 to the late 1960's, crude oil production was the focus of attention. Following a peak production level of 214,000 bopd in 1978, crude oil production level steadily declined to 124,000 bopd in 1999 (Figs 2 & 3). On the other hand, the first commercial use of natural gas was in 1953 as a fuel for power generation. In 1959, natural gas was used for the first by time by Federation Chemical Ltd. to manufacture anhydrous ammonia3,4.

An Investigation Into the Occurrence of Hydrate-Bearing Sediments Offshore the East Coast of Trinidad and Tobago

“…Natural-gas hydrate compounds are found in Arctic regions or within the first few-hundred meters of the seafloor beneath the continental slopes. One cubic meter of natural-gas hydrates, on dissociation, releases 164 m 3 of natural gas, which one can recover and use for energy production (Kvenvolden 2003;Max et al 2006). Methane gas associated with the world's deposits of hydrates is estimated to be in the range of 100,000 to 1,000,000 Tcf, which greatly exceeds the 6,557 Tcf of conventional proven gas reserves in 2013 (BP Group 2014).…”