An oil rig for deep sea drilling. Linda Jafar-Hutchinson, Business Writer
Trinidad is better placed to process the natural gas to be retrieved from the Plataforma Deltana region which straddles its maritime border with Venezuela, a think tank expert is suggesting.
Professor Anthony Bryan, a senior associate in the Americas Programme at the Washington-based Centre for Strategic and International Studies says Port of Spain already has the refinery facilities for the job.
"Looking ahead at market dynamics, given Venezuela's proximity to a well established LNG infrastructure in Trinidad and Tobago, it may one day make sense for gas from Plataforma Deltana area to be monetised in Trinidad and Tobago," said Bryan, a Trinidadian.
"Venezuela is at least a decade behind this country in the monetisation of its natural gas."
Caracas on the weekend announced that it had reached agreement with Port of Spain that some 75 per cent of the Loran fields reserves - a section of the Deltana Platform - would belong to Venezuela.
The announcement came four years after talks between the two countries on the sharing of the reserves.
During a 2003 visit to Trinidad, Venezuela's President Hugo Chavez said he hoped gas from the Plataforma Deltana, located close to Trinidad, will be processed in Port of Spain for export markets since the South American country was without an LNG plant plans have been on the drawing board for a while.
Sharing oil reserves
The two countries then agreed to negotiate the carving up of offshore gas reserves to avoid conflicts over how much belonged to each side, a process known as 'unification' of reserves.
Venezuela's energy ministry said a bi-national committee determined the Loran field, part of an area called the Deltana Platform, has about 10 trillion cubic feet of natural gas, some 7.3 trillion of which belong to the South American country, Reuters reported on Sunday.
In 2003, Venezuela gave Chevron Corp a licence to explore for gas in Deltana Platform Block 2, which includes the Loran field.
The committee also determined that the Dragon gas field in Caribbean waters north of Venezuela was not linked to adjacent gas fields in Trinidadian waters and therefore would not be subject to a unification proceeding.
Venezuela, an OPEC member, and Trinidad are to agree how to develop these reserves.
Bryan believes the Deltana is Trinidad's best hope ofexpanding its liquefied natural gas industry and giving feasibility to the proposed gas line 'Train X', in the face of what seems to be inadequate gas reserves.
Consultant Ryder Scott is now finalising an audit of the country's petroleum reserves and results are expected to be announced by the third quarter of the year.
Demand for gas in the Caribbean country of 1.3 million has been increasing rapidly from 760 mmscf/d of new gas consumption capacity from seven plants between 1995 and 2000, compared to 2,240 mmcfd of new consumption capacity of an additional seven new plants between 2001-2005.
Trinidad and Tobago currently has 34 gas based plants comprising: 10 ammonia, seven methanol, one urea, five iron reduction units, one crude oil refinery, four electricity, four LNG trains, and two gas processing plants.
Port of Spain has said that the Loran fields represent its best hope of meeting its commitment to Jamaica for 160 cubic feet of LNG per day, starting in 2009.
Gregroy McGuire, Energy Economics Lecturer at the St. Augustine Campus of the University of the West Indies (UWI) questions the Trinidad government's plan to have a new natural gas line.
"There are serious concerns about the level of reserves and whether there are reserves to support anything called Train X. I'm asking the question, 'Is cross border gas the answer?'; we're not sure," said McGuire.
McGuire said he had seen disturbing gas figures from the government in an international publication last year.
"It shows a steady decline in proved reserves, " McGuire told a Port of Spain energy conference in early February.
A slide accompanying his presentation, showed a steady 10 per cent decline in proved natural gas reserves, which were estimated at 18.81 tcf in 2004.
By 2005, the reserves had declined to 18.77 tcf and by 2006 were down to 17.30 tcf, he said.
"Whatever else the rest of the numbers show at the end of the day, when one is dealing with the business, people want to be comfortable with what they see as reserves and theywon't be comfortable that there is reserves to last for some point in time down the road.
"Well, in 14 or 15 years at current production rates that we do have remaining, is in fact serious cause for concern, "he added.
He noted that up to 10 years ago, the country had been increasing its reserves.
But: "Since 2004 we certainly have not been that successful, partly because of the rapid rate of exploitation," McGuire said.
Energy minister Dr Lenny Saith said oil companies in Trinidad would be investing US$400 million in exploration programmes over the next two years.
Some 11 wells, including two onshore, are to be drilled this year for US$234 million, and in 2008, six wells are to be drilled at a cost of US$164 million, Saith said.
"These activities are intended to ensure that adequate supplies of natural gas are available to meet both increasing domestic demand for new industrial activities and for export, " he said.
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