Trinidad aims to double LNG output in 2 years, eyes US
reuters.com
Wed February 4, 2004 12:12 PM ET
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By Matthew Robinson
PORT OF SPAIN, Trinidad, Feb 4 (Reuters) - Trinidad and Tobago plans to double its production of liquefied natural gas (LNG) in the next two years, with an eye toward expanding exports to top buyer the United States.
The Atlantic LNG project in Trinidad, which supplied 77 percent of total U.S. LNG imports in 2003, is building a fourth export plant to liquefy natural gas before it is shipped. This plant, called a "train" in industry parlance, will have capacity of 5.2 million tonnes per year.
Coupled with a streamlining program at its terminals, Atlantic LNG aims to raise its export capacity by another 20 percent as the fourth train is completed.
That should nearly double Atlantic LNG's output to around 18 million tonnes per year by 2006, Atlantic LNG President Rick Cape told reporters during a hydrocarbons conference this week. Current production is about 9.6 million tonnes a year of liquefied natgas through three trains.
"(The streamlining) will add 3 million tonnes per year across four trains," Cape said.
The growth would come as companies in the United States, the world's biggest energy market, start tapping the export market more and more to fill an anticipated demand surge as some power plants switch to natgas from coal. At the same time, natgas production has been declining in the U.S. and Canada.
"Demand growth appears to be robust and LNG infrastructure in the U.S., in the form of receiving terminals and the shipping fleet, is expanding," Cape said.
The proximity of Trinidad to the United States gives it an advantage over competitors who face higher freight rates.
"LNG from Trinidad has the lowest delivered cost to the U.S. by far. Transportation costs are 20 to 30 percent below the transportation costs from West Africa or North Africa," Cape said.
Competition among LNG projects globally is growing as energy companies scramble to build facilities to meet rising demand. Atlantic LNG, already one of the world's biggest producers, could expand further if demand continues to increase and sufficient reserves are found.
"Our site at Point Fortin can support the equivalent of another two trains..., or 25 million tonnes per year of production," Cape said.
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Trinidad has 20.76 trillion cubic feet (tcf) of proven natural gas reserves, 8.28 tcf of probable reserves, and 6.06 tcf of possible reserves, according to government figures.
UNITED STATES: TOP LNG BUYER
Atlantic LNG has been selling most of its gas to the U.S. East Coast and Gulf Coast because of strong U.S. prices, despite commitments to provide gas to Spain, Cape said.
Atlantic, which shipped its first cargo from Train 1 in 1999, is a partner in the state Natural Gas Co. (NGC) with some of the world's biggest natural gas companies, including BG Group (BG.L: Quote, Profile, Research) , BP (BP.L: Quote, Profile, Research) and Repsol-YPF (REP.MC: Quote, Profile, Research) .
The joint venture arrangement by partners which have other global LNG plants gives the project flexibility to divert cargoes from one market to another to capture the best return.
Foreign firms which have won the rights to offshore natural gas exploration and production fields in Trinidad are also bolstering investment plans to feed the gas needs of the four LNG terminals.
"We plan to spend $1.9 billion in exploration and development through 2008," Robert Riley, President of BP's operations in Trinidad and Tobago, told reporters.
BP, which pumps half of the 135,000 barrels per day (bpd) of oil produced by Trinidad and 70 percent of its total natural gas production of about 2.8 billion cubic feet (bcf) per day, plans to invest $230 million in seismic geologic studies alone in the country over the next five years, Riley said.
The streamlining or "de-bottlenecking" will give the partnering companies a quick production jump without a big investment.
"(It doesn't cost) a whole lot actually, it's a lot of bang for your buck," Riley said. |
