‘Furthermore, there is no project from 2022 to 2027 that could take the country’s production of natural gas back above 3.0 bcfd.’
By Kevin Ramnarine
AT the recently concluded Energy Conference, the prime minister and the minister of energy alluded to a boost in natural gas production in 2027/2028 due to the Manatee and the Calypso projects.
That sounds good but 2027 is five years away. What happens between now and then?
Note that while Manatee is progressing within Shell’s approval systems, it has not yet attained Final Investment Decision (FID) status.
In recent days, Graham Tiver of Woodside which now owns what was BHP’s petroleum business flagged Calypso as an opportunity for his company.
Woodside was recently admitted to the New York and London stock exchanges. The discoveries that constitute Calypso arise out of production sharing contracts awarded in 2012.
If Calypso attains first gas in 2028 it would mean a 16-year wait from contract award to production. This is simply too long a wait for a country with a serious shortage of natural gas.
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I gave this synopsis of these two projects to demonstrate that they are at least five years away and still tenuous. My personal view is Manatee seems to be on track to happen but the rate of production from Manatee as announced by the minister of energy at the Energy Conference seems to be a high estimate.
Getting Calypso to production is more difficult given its distance from infrastructure and the depth of the water in that area (over 1,000 meters water depth).
These two projects are therefore the great hopes of a flagging T&T energy sector, and I am happy to have played a role in advancing one of them (Calypso).
Manatee is also well known to me as I worked on it during my years at British Gas (now Shell) and in my years as minister, we spared no effort to progress cross-border collaboration with Venezuela as did the Manning administration before.
If Manatee and Calypso offer a ray of light at the end of the 2020’s tunnel, then what happens from 2022 to 2027?
Currently, the country’s natural gas production continues to decline. In 2021 natural gas production averaged 2.58 billion cubic feet per day (bcfd). This was the lowest production since 2003. In 2018, a mere four years ago, it stood at 3.63 bcfd thanks mainly to production from the Juniper project.
The precipitous fall in natural gas production is the main reason why the country cannot be celebratory about high natural gas prices and high ammonia prices in recent months.
We have heard that production will soon ramp up and all will be well etc. There will be no ramp-up in 2022 or in 2023 or anytime soon.
The Cassia C compression project when it comes into production in late 2022 will simply be “backfilling” for acute declines in BP’s production in the last two years.
Furthermore, there is no project from 2022 to 2027 that could take the country’s production of natural gas back above 3.0 bcfd.
Current planned efforts from BP, Shell and EOG will simply add volumes that will be combating decline. The best we can hope for in the period 2022 to 2027 is to stand still and the worst that can happen is national production could fall under 2.5 bcfd and may even get dangerously close to 2.0 bcfd by 2026.
My understanding of the numbers also indicates that two of our five natural gas producers could be out of business by 2026.
The road from the present day to 2027 may therefore be a hard one for plants at Point Lisas (in terms of gas supply).
We have already seen the consequences of reduced natural gas supply with the closure of Atlantic Train 1, Titan Methanol, MHTL’s M1 plant and the Yara ammonia plant.
Will there be more closures in the coming years? How did we get to this point of decline? I will answer that another time, but the energy sector leadership understands why.
The Government has always sought to paint a picture of an energy sector that is doing great with brighter days ahead. I suppose one cannot fault them for doing that.
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They are, afterall, politicians first. However, we also need to be told the unfiltered reality of the situation. It cannot be the case that any bad news is dismissed. For example, in May 2019, news of BP’s failure with the Cashima/Cannonball infill drilling programme was dismissed by Minister Colm Imbert in his mid-year review of the 2019 budget.
Today we live to see that BP was right to warn the country of the coming rapid decline in their production and the protestations of the Minister of Finance were wrong.
The recent deepwater bid round and lack of interest except for joint bids from BP and Shell sends a signal that excitement in our deepwater has waned.
The deepwater, however, in my opinion, remains the great hope for the T&T energy sector but we must get Woodside across the Final Investment Decision (FID) line.
The period 2022 to 2027 will however see natural gas production in T&T struggle and will be much the same as the last three years. The consequences of sub-2018 natural gas production levels for T&T are dire.
Kevin Ramnarine is a principal energy consultant at the firm Triple Junction, a former minister of energy, the holder of a Masters’s Degree in Petroleum Engineering and an International MBA.
T&T To Struggle for Natural Gas Production Until 2027
‘Furthermore, there is no project from 2022 to 2027 that could take the country’s production of natural gas back above 3.0 bcfd.’
AT the recently concluded Energy Conference, the prime minister and the minister of energy alluded to a boost in natural gas production in 2027/2028 due to the Manatee and the Calypso projects.
That sounds good but 2027 is five years away. What happens between now and then?
Note that while Manatee is progressing within Shell’s approval systems, it has not yet attained Final Investment Decision (FID) status.
In recent days, Graham Tiver of Woodside which now owns what was BHP’s petroleum business flagged Calypso as an opportunity for his company.
Woodside was recently admitted to the New York and London stock exchanges. The discoveries that constitute Calypso arise out of production sharing contracts awarded in 2012.
If Calypso attains first gas in 2028 it would mean a 16-year wait from contract award to production. This is simply too long a wait for a country with a serious shortage of natural gas.
Paid advertisement
I gave this synopsis of these two projects to demonstrate that they are at least five years away and still tenuous. My personal view is Manatee seems to be on track to happen but the rate of production from Manatee as announced by the minister of energy at the Energy Conference seems to be a high estimate.
Getting Calypso to production is more difficult given its distance from infrastructure and the depth of the water in that area (over 1,000 meters water depth).
These two projects are therefore the great hopes of a flagging T&T energy sector, and I am happy to have played a role in advancing one of them (Calypso).
Manatee is also well known to me as I worked on it during my years at British Gas (now Shell) and in my years as minister, we spared no effort to progress cross-border collaboration with Venezuela as did the Manning administration before.
If Manatee and Calypso offer a ray of light at the end of the 2020’s tunnel, then what happens from 2022 to 2027?
Currently, the country’s natural gas production continues to decline. In 2021 natural gas production averaged 2.58 billion cubic feet per day (bcfd). This was the lowest production since 2003. In 2018, a mere four years ago, it stood at 3.63 bcfd thanks mainly to production from the Juniper project.
The precipitous fall in natural gas production is the main reason why the country cannot be celebratory about high natural gas prices and high ammonia prices in recent months.
We have heard that production will soon ramp up and all will be well etc. There will be no ramp-up in 2022 or in 2023 or anytime soon.
The Cassia C compression project when it comes into production in late 2022 will simply be “backfilling” for acute declines in BP’s production in the last two years.
Furthermore, there is no project from 2022 to 2027 that could take the country’s production of natural gas back above 3.0 bcfd.
Current planned efforts from BP, Shell and EOG will simply add volumes that will be combating decline. The best we can hope for in the period 2022 to 2027 is to stand still and the worst that can happen is national production could fall under 2.5 bcfd and may even get dangerously close to 2.0 bcfd by 2026.
My understanding of the numbers also indicates that two of our five natural gas producers could be out of business by 2026.
The road from the present day to 2027 may therefore be a hard one for plants at Point Lisas (in terms of gas supply).
We have already seen the consequences of reduced natural gas supply with the closure of Atlantic Train 1, Titan Methanol, MHTL’s M1 plant and the Yara ammonia plant.
Will there be more closures in the coming years? How did we get to this point of decline? I will answer that another time, but the energy sector leadership understands why.
The Government has always sought to paint a picture of an energy sector that is doing great with brighter days ahead. I suppose one cannot fault them for doing that.
Paid Advertisement
They are, afterall, politicians first. However, we also need to be told the unfiltered reality of the situation. It cannot be the case that any bad news is dismissed. For example, in May 2019, news of BP’s failure with the Cashima/Cannonball infill drilling programme was dismissed by Minister Colm Imbert in his mid-year review of the 2019 budget.
Today we live to see that BP was right to warn the country of the coming rapid decline in their production and the protestations of the Minister of Finance were wrong.
The recent deepwater bid round and lack of interest except for joint bids from BP and Shell sends a signal that excitement in our deepwater has waned.
The deepwater, however, in my opinion, remains the great hope for the T&T energy sector but we must get Woodside across the Final Investment Decision (FID) line.
The period 2022 to 2027 will however see natural gas production in T&T struggle and will be much the same as the last three years. The consequences of sub-2018 natural gas production levels for T&T are dire.
Kevin Ramnarine is a principal energy consultant at the firm Triple Junction, a former minister of energy, the holder of a Masters’s Degree in Petroleum Engineering and an International MBA.