(Trinidad Guardian) Two days before Finance Minister Colm Imbert prepares to present his 2019 mid-term budget review, comes news that BPTT will not have enough natural gas to supply Atlantic LNG’s Train One and the plant may have to close down for at least two years.
“Recent disappointing results from our infill drilling programmes have had a material impact on our forecasted production, especially in 2020 and 2021. This means there are challenges to our supply of gas to Train 1 after 2019. BP along with Atlantic and its shareholders are working through options for the future of the train,” BPTT said in response to questions from the media.
Infill drilling is used to increase production in a field that is already operating.
This potentially means a loss of hundreds of millions of dollars in government revenue and could put any economic recovery at risk, since Imbert has consistently said he expects increased natural gas production to drive economic growth. It will also cause an abrupt end to the Government’s plan to increase natural gas production.
The announcement sent shockwaves throughout the energy sector yesterday, with several leaders in the sector calling it a major dent in confidence and a shock to the sector.
By a Guardian Media calculation, this will mean a 20 per cent drop in BPTT production and a 12 per cent decline in the country’s natural gas production. It is also likely to lead to a fall in the crude oil output due to less condensate from the country’s third largest oil producer and reduce Atlantic LNG’s production to less than 70 per cent of its capacity.
All this spells a loss of revenue to Government in taxes from the production of oil and gas and the export of LNG. It will also hurt TTNGL, as Pheonix Park Gas Processors will have fewer liquids to process due to a reduction in the volume of gas available for processing. It is also likely to further damage Trinidad and Tobago’s confidence in the downstream sector, which has suffered from natural gas curtailment and was recently seeing some increase in production.
Yesterday, as the news made its way into the public domain, the Government was unwilling to talk about the issue, with Colm Imbert pointing to Energy Minister Franklin Khan for a response.
Khan said, “This is a shareholder issue. The Government will have more to say but at this time this is a shareholder issue.”
Reminded that the Government is a shareholder of Train One due to the National Gas Company’s ownership of 11 per cent of Train 1, Khan repeated his position that he will not comment on the matter outside of the fact that it was a shareholder matter.
BPTT said there are challenges to their supply of gas to Train 1 after 2019.
BPTT regional president Claire Fitzpatrick said, “Despite BPTT’s recent exploration successes, such as Savannah and Macadamia and ongoing success in the development of the Angelin field, these recent drilling results remind us that there is inherent uncertainty in the subsurface.”
She added: “This is the nature of our business and we will continue to leverage the latest technology to find and develop resources. We remain committed to the development of our acreage in the Columbus Basin and will continue to progress the Angelin, Cassia Compression and Matapal Projects as planned.”
BPTT added while the company, along with Atlantic LNG and its shareholders, are working through options for the future of the train, the other three trains remain unaffected.
The company expects to continue with their plans for exploration, will work programmes in 2019 and they noted that there is no impact to sanctioned projects which include Angelin, Cassia Compression and Matapal.
Train 1 began commercial operation on March 13, 1999, being the first LNG facility to operate in the Atlantic Basin and the second in the Western Hemisphere. The first shipment of LNG left Trinidad and Tobago on May 1, 1999, bound for Boston, Massachusetts.
BPTT is the country’s largest natural gas producer, accounting for more than 50 per cent of the total supply. It is also the largest supplier to Train 1, providing close to 400 million standard cubic feet of gas per day to the plant.
