Why Choose Trinidad & Tobago: New Opportunities in Downstream Energy
Daren Ragoonanan (R.Eng.) Business Analyst - Office of the President National Energy Corporation
New Opportunities in Downstream Energy
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rinidad and Tobago has been utilising natural gas as a feedstock for producing downstream products since 1959. In the late 1960s, the Government of Trinidad and Tobago took a policy decision to monetise natural gas that was being flared. This decision resulted in the establishment of the National Gas Company of Trinidad and Tobago Ltd (NGC) in 1975 and National Energy Corporation of Trinidad and Tobago Ltd (NEC) in 1979. Consequently, the State made investments in the production of iron and steel, ammonia, urea and methanol plants at the Point Lisas Industrial Estate. While these downstream ventures have been economically beneficial to Trinidad and Tobago by way of revenue generation, job creation, capital formation and technology transfer, it has been argued that the real value added element of the natural gas monetisation value chain occurs when these intermediate products are used in the production of tertiary products. New businesses, centred on these downstream derivative products, would allow for levels of product differentiation that do not exist in the production of primary chemicals such as methanol and ammonia. This will also enable the energy sector to be leveraged so as to create linkages with other sectors in the economy, specifically the manufacturing sector. Further diversification of the natural gas utilisation mix is desirable, as it adds another layer of industries and further lends to the development of a diversified and sustainable petrochemical industrial base.
16 • Business Trinidad & Tobago
National Energy Corporation NEC, a wholly-owned subsidiary of NGC, was incorporated in 1979 to monetise the country’s natural resources and develop and manage industrial marine infrastructure. As a result, NEC was involved in the construction and operation of the early petrochemical plants at the Point Lisas Industrial Estate. Today, NEC’s mandate encompasses the conceptualisation, promotion, development and facilitation of new energy-based and downstream industries in Trinidad and Tobago. Strategy for Downstream Development The strategy for development of the downstream natural gas industry is premised on the uncertainty of commodity prices, which can be volatile and unpredictable. As such, new projects need to focus on downstream developments and opportunities, which must include higher value products, thus creating greater added-value for our natural gas resource and increased employment opportunities (construction and permanent). This shift in focus will also create enhanced potential and a wider base for research and development, thus leading to a knowledge-based and more technologically advanced industry. More importantly, though, the output from the energy sector would be used to create real and sustainable opportunities in the manufacturing sector. Downstream Opportunities The key focus areas for investment and development include petrochemicals, plastics, metals, biochemical and agro-