By Sherwin Long

The question of how T&T can maximise its use of natural gas and add value to this treasured hydrocarbon resource has been often asked.

Dr Vernon Paltoo, the National Energy Corporation’s team leader for business development, attempted to answer these questions last week.

During the first international Tobago Gas Technology Conference held at Hilton Tobago last week, Paltoo listed a proposed polyethylene estate and three urea ammonia nitrate plants as Government’s current petrochemical priorities.

For Paltoo, the balance between going further downstream into petrochemicals and using most of our natural gas for liquefied natural gas (LNG) production has to be scrutinised.

He used examples from current natural gas usage from both methanol and liquefied natural gas producers.

“The Atlas and M5000 (methanol) plants use about 160 million cubic feet per day. On the other hand Atlantic LNG Train IV uses 800 million cubic foot a day,” Paltoo said.

“It is a lot more gas for an LNG plant as opposed to a methanol plant which is why we have to be very careful in terms of our LNG expansion.”

He admitted that LNG brings in most of the country’s revenue but T&T has to counterbalance earning revenue and development of the country’s downstream industries.

Given concerns over T&T’s natural gas reserves, he said the amount of natural gas needed for the projects was being seriously monitored.

“We do all these projects with careful consideration of natural gas reserves and we ensure all of these projects can be facilitated within our current, existing reserves and targeted production rates,” he said.

According to a 2005 Ryder Scott audit, T&T currently has 18 trillion cubic feet of proven natural gas reserves.

However, Paltoo quoted 35 trillion cubic feet as the reserves.

But he was basing reserves on probable and possible gas reserves, not proven reserves.

With T&T currently the number one exporter of both methanol and ammonia world-wide, Paltoo was quick to note that the country had the least natural gas reserves of the top ten ammonia exporters.

T&T ranks higher than only Chile and Equatorial Guinea in natural gas reserves among the top ten exporters of methanol, he said.

Paltoo added that the world’s capacity for both methanol and ammonia up to 2010 was rising but the demand was significantly lower.

“Expansion in additional methanol and ammonia could adversely affect our position as a key player by further saturating the market,” he said.

In place of methanol and ammonia, he positioned other petrochemical derivatives as being economically viable for T&T.

In addition to polyethylene and urea and ammonia, he said polypropylene, acetic acid and melamine were other petrochemicals which will have optimum value for T&T.

Other downstream prospects under development include a methanol to polypropylene complex, a maleic anhydride derivative complex and an ethane-based polyethylene complex.

Paltoo noted that these industries would be housed at either the Point Lisas Industrial Estate or at the Union Industrial Estate.

Polyethylene demand is expected to increase by seven per cent every year until 2010, Paltoo estimated, while polypropylene demand is set to grow at a rate of eight per cent every year until 2010.

He added that the manufacture of finished products derived from polyethylene was labour intensive and could hire up to 500 or more workers.

“If we produce methanol alone then that one trench of natural gas is being converted to methanol. But if we take that methanol and develop more products then that same original trench of gas has significant value added to it so we get more revenue,” he said.

Polyethylene can be used to create pipes, containers, appliance parts and even bottle crates.

The plan is to have a conceptual T&T polyolefin complex with two mega-methanol plants and an ethane cracker all supplying polypropylene and polyethylene manufacturing facilities, Paltoo said.

The ethane for the polyethylene facility will be from the NGC’s domestic supply and Atlantic LNG (trains I to IV) which will provide a combined 52,000 barrels of ethane. This could supply an ethane cracker with 800,000 tonnes per year, he said though admitting this was an idealistic scenario view.

He said based on Government’s “strategic intention” they would consider whether to finance these projects alone or as a joint venture with an established multi-national company.