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Caribbean Energy Information System (CEIS) January 2012 petroleum import. The question brought to mind in recent times is whether LNG is the future for the petroleum industry? Trinidad and Tobago has been the Caribbean’s top producer of Natural Gas and has developed the industry to the point where approximately 70% of the United States demand for LNG has been met by T&T. LNG from Trinidad and Tobago has also been transported to other parts of the world and the product is also dispatched across the globe through re-gasification facilities in other countries such as Canada, Chile, the Dominican Republic, and Argentina. In the Dominican Republic, the use of LNG has been rapidly increasing where the product now forms approximately one third of the countries energy matrix with increasing use in the transportation sector. LNG Being Loaded Onto a Tanker Source: Center for Liquefied Natural Gas

The development of the Natural Gas Industry for years has been linked to oil prices and the demand for oil particularly in the more developed countries. However, the commodity has not been a globally traded one mainly due to the fact that the product was primarily moved by pipelines hence creating fairly distinct prices and regional markets across the globe. With the development of Liquified Natural Gas (LNG) in 1964, the framework has been dramatically altered as

the product can now be transported across the globe without the need for pipeline infrastructure. LNG takes up much less space, approximately 1/600th the volume of the same amount of gaseous natural gas. This allows it to be shipped much more efficiently via ocean tankers thereby creating options outside of Crude Oil as a primary

CARIBBEAN PETROLEUM UPDATE

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The success of the natural gas industry in Trinidad & Tobago has led to a boom in the demand for LNG worldwide. In many other countries across the globe, the product is increasingly being used with particular focus on the electricity and transport sectors. This increased demand is also partly due to continued on page 2/ CONTACT US

Caribbean Energy Information System Scientific Research Council Hope Gardens, Kingston 6, Jamaica 1-876-927-1779 (Telephone) 1-876-977-1840 (Fax) ceis@src-jamaica.org www.ceis-caribenergy.org

is a monthly Bulletin which highlights petroleum issues affecting or relevant to the Caribbean, international developments that may affect the region’s way of life and movements in oil prices and retail prices for fuel regionally.


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Call: 1-876-927-1779 | Caribbean Petroleum Update : January 2012

Is Shale Gas/LNG the Future for the Caribbean Petroleum Industry?.................continued from page 1/ price volatility and supply issues associated with oil and the obvious need to reduce our dependency on the so called “Black Gold.” Apart from T&T, Barbados, Dominican Republic and Cuba, the other Caribbean countries do not have the necessary facilities or infrastructure to utilize LNG resulting in total dependence on imported oil. The price for oil in comparison to LNG is significantly different. The price for Natural gas sells for roughly 4 dollars per million BTU in the U.S. but as high as 16 dollars in Japan and Asia. The low LNG prices are mainly a function of oversupply of gas internationally both due to increased LNG supply, with significant new capacity coming on stream globally, and low global demand due to inadequate infrastructure in some countries to accommodate the product. If all Caribbean countries had unrestricted access to LNG significant economic gains could be achieved. Many Caribbean nations such as Jamaica that depend heavily on Crude Oil imports would welcome the idea of LNG imports. However, many factors have restricted significant progress in this area. One such factor relates to the non existence of the local infrastructures such as a re-gasification plant and pipelines to convert LNG to its gaseous state and to transport the LNG for use. Like Jamaica, many other Caribbean countries are desirous of using the product to fuel the electricity sector. However, most of the existing generating plants are not equipped to use the product and as such a complete modernization of these electricity generating facilities would be required. To do so would require great capital investments on the part of investors which many are reluctant to take on not having any guaranteed LNG supply arrangements in place. The modernization or building of generating facilities to accommodate the use of LNG as the primary generating fuel would also take years as this would not happen at the snap of a finger. The necessary legislations and framework would also have to be in place to address issues regarding storage, use and transportation of the product inland

signal to production companies the need to increase the supply of natural gas to the market. Trinidad over the years has increased production to satisfy demand contracts with the United States. However, the pace at which T&T has sought to develop supply contracts with its regional neighbours has been slow as the necessary infrastructure and consensus on pricing have not materialized. This situation may very well be dispelled in the near future with the United States announcing increased production of Shale gas and their possibility of becoming a net exporter by sometime in 2012. This could impact and reconfigure the regional energy market of which price is an important corollary. A new era and restructuring of where and how present and prospective natural gas importing nations of the world source their supplies could be at hand. The diversification of the Caribbean nations energy mix may possibly be closer with U.S. possible intervention into the Caribbean market. Despite this new development, Trinidad & Tobago LNG experts are confident that the nature of their gas contracts remains sound. However, that said, the question at hand is whether Trinidad & Tobago is in a state of denial or fooling themselves? Supply and demand are interlinked and both drive prices, If U.S. is able to satisfy its local demand for LNG, exports from Trinidad & Tobago may no longer be required in such large quantities thereby forcing the twin island to find new markets. Additionally the U.S. may look at tapping into the Trinidad’s export market and possibly there might be some level of price convergence. Oil may no longer be the primary petroleum product if plans by nations having Natural Gas or Shale Gas resources are expedited. It would be “a dream come” through for many Caribbean nations if they too, could boast a less than US$0.10/Kwh for electricity from Natural Gas. Bearing in mind that demand and supply determine prices, there is a strong likelihood that if the necessary steps are taken to put the necessary infrastructures in place to accommodate the use of LNG then this product could become the primary fuel of choice for Caribbean nations and the World at large. continued on page 3/

The availability and supply of LNG from Trinidad at agreed or affordable prices is another factor. Inadequate supply at any one time can lead to price increases, which

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Is Shale Gas/LNG the Future for the Caribbean Petroleum Industry?.................continued from page 2/

Below is a Map of the World Shale Gas Resources.

ADVANTAGES OF LNG  LNG has very low particulate emissions because of its low carbon to hydrogen ratio.  There are negligible evaporative emissions, requiring no relevant control.  Due to its low carbon-to-hydrogen ratio, it produces less carbon dioxide per GJ of fuel than diesel.  It has low cold-start emissions due to its gaseous state.  It has extended flammability limits, allowing stable combustion at leaner mixtures.  It has a lower adiabatic flame temperature than diesel, leading to lower Sulphur emissions.

 It has a much higher ignition temperature than diesel, making it more difficult to auto-ignite, thus safer.  It contains non-toxic components.  When released to the atmosphere and evaporated it is much lighter than air and thus it is safer than spilled diesel.  Methane is not a volatile organic compound (VOC).  Engines fuelled with natural gas in heavy-duty vehicles offer more quiet operation than equivalent diesel engines, making them more attractive for use in urban areas.  It has nearly zero sulfur levels and, thus, negligible sulfate emissions.  LNG has little to no chance of igniting or exploding should a spill occur. continued on page 4/

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Call: 1-876-927-1779 | Caribbean Petroleum Update : January 2012

Is Shale Gas/LNG the Future for the Caribbean Petroleum Industry?.................continued from page 3/ Proved Natural Gas Reserves of the World

Table 1

Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 26 26 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

Country Russia Iran Qatar Turkmenistan Saudi Arabia United States of America United Arab Emirates Nigeria Venezuela Algeria Iraq Indonesia Kazakhstan Malaysia Norway China Uzbekistan Kuwait Egypt Canada Libya Netherlands Ukraine India Pakistan Australia Azerbaijan Oman Bolivia Vietnam Trinidad & Tobago Yemen Argentina Brunei Mexico Brazil Great Britain & Northern Ireland Peru Thailand Myanmar Angola Syria Papua New Guinea East Timor Germany Poland Bangladesh Cameroon Mozambique Colombia

Proved Natural Gas Reserves (million cubic meters) 47,570,000 29,610,000 25,260,000 7,940,000 7,319,000 6,731,000 6,071,000 5,215,000 4,840,000 4,502,000 3,170,000 3,001,000 2,407,000 2,350,000 2,313,000 2,265,000 1,841,000 1,794,000 1,656,000 1,640,000 1,540,000 1,416,000 1,104,000 1,075,000 885,300 849,500 849,500 849,500 750,400 610,000 531,500 478,500 441,700 390,800 372,700 365,000 342,900 335,300 317,100 283,200 269,800 240,700 226,500 200,000 175,600 164,800 141,600 135,100 127,400 105,900

Per capita (thousand cubic meters) 339.69 441.69 30,313.76 1,625.42 255.14 21.91 1,265.19 34.95 180.5 131.72 109.52 12.49 156.3 91.38 496.29 1.69 66.69 666.63 19.93 48.97 244.04 84.71 24.16 0.92 5.02 39.95 103.11 248.53 76.77 7.01 432.13 20.09 10.8 1,006.72 3.35 1.84 5.61 11.35 4.81 5.88 21.08 11.93 37.39 188.19 2.13 4.28 0.91 7.16 5.88 2.32

per square km (thousand cubic meters) 2,904.60 19,332.80 2,180,217.50 16,896.10 3,404.70 734.7 72,619.60 5,725.90 5,487.20 1,890.20 7,247.90 1,656.60 891.6 7,150.30 7,601.50 236.7 4,327.70 100,684.70 1,663.60 180.3 875.2 41,778.50 1,905.60 361.6 1,148.40 110.6 10,280.90 2,744.70 692.7 1,967.30 103,646.60 906.3 161.4 74,226.00 191.7 43.1 1,417.40 262 620.7 433.4 216.4 1,310.80 500.2 13,446.30 503.6 541.7 1,087.80 285.8 162 95.5

Date January 2009 est. January 2010 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2006 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est. January 2009 est.

Rank 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 70 70 73 74 75 76 77 78 79 80 80 82 83 84 85 86 87 87 87 87 91 92 93 94 95 96 97 98 99 100 101

Country Philippines Chile Italy Bahrain Congo (Republic) Sudan Cuba Tunisia Romania Namibia Denmark Rwanda Korea (South) Afghanistan Serbia Equatorial Guinea New Zealand Croatia Israel Cote d'Ivoire Gabon Mauritania Ethiopia Ghana Japan Austria Slovakia Ireland Ecuador Georgia Turkey Hungary France Tanzania Taiwan (Rep. of China) Jordan Bulgaria Kyrgyzstan Somalia Tajikistan Czech Republic Guatemala Belarus Spain Greece Morocco Benin Congo (Dem. Rep.) Albania Barbados South Africa

Proved Natural Gas Reserves Per capita per square km (million cubic (thousand (thousand cubic meters) cubic meters) meters) Date 98,540 1.01 330.5 January 2009 est. 97,970 5.9 131.7 January 2009 est. 94,150 1.62 320.1 January 2009 est. 92,030 126.45 124,197.00 January 2009 est. 90,610 22.58 265.3 January 2009 est. 84,950 2.07 35.8 January 2009 est. 70,790 6.18 644.6 January 2009 est. 65,130 6.21 419.2 January 2009 est. 63,000 2.84 274 January 2009 est. 62,290 29.54 75.7 January 2009 est. 61,300 11.14 1,444.60 January 2009 est. 56,630 5.41 2,295.70 January 2009 est. 50,000 1.02 515.9 January 2008 est. 49,550 1.74 76 January 2009 est. 48,140 6.52 621.4 January 2009 est. 36,810 58.11 1,312.30 January 2009 est. 33,980 8.06 126.9 January 2009 est. 30,580 6.81 546.3 January 2009 est. 30,440 4.21 1,406.50 January 2009 est. 28,320 1.37 89.1 January 2009 est. 28,320 18.69 109.9 January 2009 est. 28,320 9.05 27.5 January 2009 est. 24,920 0.29 24.9 January 2009 est. 22,650 0.95 99.5 January 2009 est. 20,900 0.16 57.3 January 2009 est. 16,140 1.97 195.8 January 2009 est. 14,160 2.59 294.4 January 2009 est. 9,911 2.36 143.9 January 2009 est. 8,919 0.61 32.2 January 2009 est. 8,495 1.84 121.9 January 2009 est. 8,495 0.11 11 January 2009 est. 8,098 0.82 90.4 January 2009 est. 6,937 0.11 12.6 January 2009 est. 6,513 0.16 7.4 January 2009 est. 6,229 0.27 193.1 January 2009 est. 6,031 0.95 67.9 January 2009 est. 5,663 0.79 52.2 January 2009 est. 5,663 1.04 29.5 January 2009 est. 5,663 0.58 9 January 2009 est. 5,663 0.77 40 January 2009 est. 3,964 0.39 51.3 January 2009 est. 2,960 0.24 27.6 January 2006 est. 2,832 0.29 14 January 2009 est. 2,548 0.06 5.1 January 2009 est. 1,982 0.18 15.2 January 2009 est. 1,501 0.04 3.4 January 2009 est. 1,133 0.13 10.2 January 2009 est. 991 0.01 0.4 January 2009 est. 850 0.23 31 January 2009 est. 142 0.5 329.3 January 2009 est. 27 0 0 January 2006 est.

For non-listed countries is no information available. 1 cubic meter corresponds to 1.308 cubic yards. Source: CIA World Factbook (2010-08-04)

ADVANTAGES OF LNG (cont’d)  

When LNG is vaporized into its gaseous form, the fuel will only burn when mixed with air in concentrations of 5 and 15%. LNG and the vapors associated with it do not explode in an open environment making the product safer than any other Petroleum fuel.

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Compared with other fossil fuels, Natural gas is relatively clean with regards to air pollution and greenhouse gas emissions and has larger proven reserves than Crude Oil. Liquefaction makes it possible to market important gas reserves located in remote areas, far away from consumer countries, as it reduces the volume: 1litre of liquefied natural gas (LNG) corresponds roughly to 600 litres of natural gas.

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CARIB PETROLEUM NEWS & HAPPENINGS CUBA

VENEZUELA

Oil rig already in Cuban waters after US inspection >> 20/01/2012

Petrobras' CEO participates in Global Pact meeting at UN Headquarters >> 16/12/2011

Fidel Castro warns again about nuclear war and climate change >> 09/01/2012

Venezuela Increasing Influence in Region Through Petrocaribe >> 13/12/2011

Cuba boosts use of sugarcane biomass to generate electricity >> 22/12/2011

Venezuelan government "prepared to amicable arrangement" with Exxon >> 06/12/2011

Cuba and Venezuela sign $1.6 billion in cooperation accords >> 21/12/2011

Petrocaribe to boost Caribbean refining storage >> 06/12/2011 Venezuela Confirms Buys Jets From Brazil’s Embraer >> 03/12/2011

HAITI

Venezuelan oil exports to the US down to 1992 levels >> 01/12/2011

Haiti leader launches power programme >> 24/01/2012

GUYANA Guyana has a great deal of promise in oil and gas, says energy executive >> 28/01/2012 Guyana continues hunt for offshore oil >> 26/01/2012

JAMAICA

Drilling in the caribbean sea courtesy embassy of Colombia Washington

Private equity firm, Blue Equity LLC, on Tuesday acquired control of Cool Petroleum Holdings Limited which operates the Shell gas station and oil distributorship in Jamaica. >> 11/01/2012

INTERNATIONAL UN watchdog group visits Iran as conflict over oil embargo continues >>30/01/2012 No energy industry backing for the 'F word' >> 29/01/2012

MONSTERRAT

Iran nuclear scientist killed in car bomb attack >> 12/01/2012

Shortage of aviation fuel expected to affect air travel to Montserrat >> 20/12/2011

Iran tests cruise missiles over Strait of Hormuz (Threatens closure of strait, passageway for one-sixth the world's oil supply) >>03/01/2012 Oil price soars on promising economic news >> 21/12/2011

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Call: 1-876-927-1779 | Caribbean Petroleum Update : January 2012

REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP January 2012 Retail prices for Regular Unleaded Gasoline in the sixteen Caribbean countries reviewed at the end of January 2012, remained relatively stable in nine countries. Marginal decreases were seen in Belize and BVI while the other five countries saw increases in the range of 1% and 5% when compared to the previous month. The average retail price at the end of January 2012 for the product over the sixteen countries when compared to the average retail price seen in December 2011 remained relatively the same.

Regular Unleaded Gasoline Average Retail Price (US$/Litre) 2012 JAN 1.23 1.33 1.55 1.41 1.26 1.12 1.23 1.11 1.23 1.19 1.20 1.21 1.19 1.40 0.42 1.58

COUNTRIES ANTIGUA/ BARBUDA BAHAMAS [91 OCT] BARBADOS BELIZE [87 OCT] B.V.I. [87 OCT] DOMINICA GRENADA (95 OCT) GUYANA JAMAICA 87 Octane[E10] MONTSERRAT ST. KITTS/ NEVIS ST. LUCIA ST. VINCENT/GRENADINES SURINAME [95 OCT] TRINIDAD/[92 OCT] TURKS/ CAICOS

NOTE: *US Gallon = 3.785 L *Imperial Gallon = 4.546 L *As at November 1, 2009 MTBE was phased out from all gasoline blends in Jamaica and replaced with 10% Ethanol.

Comparative Retail Pump Prices Regular Unleaded Gasoline JANUARY 2012

CHART: 1.80 1.60

US$/Litre

1.40 1.20 1.00

0.80 0.60 0.40

0.20 0.00

16 Caribbean Countries

See prices for other products at www.ceis www.ceis--caribenergy.org . C

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Average Weekly & Monthly Crude Oil Prices (Nov-11 - January 2012)

120.00

Nov-11 Dec-11 Jan-12

US$/BBL US$/BBL

115.00 110.00

102.39

105.00

100.08

100.00

99.32

95.00 90.00 85.00 80.00

WK 1

WK 3 Period

WK 4

Mth Avg

Average Monthly World Crude Oil Prices (2009 - 2011) 109.61

108 98

US$/BBL

International Crude Oil prices over the period November 2011 to January 2012 saw prices on the upward trend in January when compared to the two previous months. The highest weekly price seen in January for the product was US$102.39/BBL - reflected at the end of the 1st week. Crude Oil prices for the month of January remained close to US$100/BBL for the entire month. The average price for the product in January (US$100.05/BBL) was approximately 2% and 4% higher than December and November 2011 respectively.

WK 2

88.14

88 78

76.19

68

58 48

2009

2010

2011

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Caribbean Energy Information System (CEIS) primary report of historical annual petroleum energy statistics provided for 18 Caribbean Countries. Included are data on total energy production, consumption, and trade; overviews of petroleum, natural gas, electricity, as well as financial and environmental indicators for over twenty years.

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CEIS Petroleum Update January 2012  

CARIBBEAN PETROLEUM UPDATE is a monthly Bulletin which highlights petroleum issues affecting or relevant to the Caribbean, international dev...

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