The National Gas Company of Trinidad and Tobago

AUGUST 2017

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The National Gas Company of Trinidad and Tobago National Value

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THE NATIONAL GAS COMPANY OF TRINIDAD AND TOBAGO

NATIONAL VALUE The energy market has long been a mainstay for Trinidad and Tobago, with the gas industry playing a major role across the twin-island republic. Whilst the sector is facing global challenges, Trinidad and Tobago remains a key player at the top of the list. We took a look at The National Gas Company Trinidad & Tobago Ltd (NGC) and The NGC Group of Companies, to drill a little deeper into the operations and history behind some of the sector’s leading names within the region.

WRITTEN BY JASPER MILVAIN

THE NATIONAL GAS COMPANY OF TRINIDAD AND TOBAGO

In essence, NGC constructs, maintains and operates Trinidad

and Tobago’s natural gas transmission and distribution pipeline network. Established 42 years ago in August 1975, the 100% state-owned NGC is located on the Point Lisas Industrial Estate - the most prolific industrial centre on the island. In terms of assets, it has become one of the largest companies in the Caribbean and Latin America, but it is the utilisation of these assets which is important.

T

his is why NGC have maintained a 99% pipeline availability rating for most of their existence, a history that has helped it to amass customers from power generation plants at Cove

Industrial Estate, Tobago, Point Lisas, La Brea and Penal, as well as a large group of global-scale petrochemical plants located within the same industrial estate, and lighter manufacturing companies scattered across the country.

NGC is part of The NGC Group, which has grown to include multiple subsidiaries, sucg as The National Energy Corporation of Trinidad and Tobago Ltd, La Brea Industrial Development Company Ltd (Labidco), Phoenix Park Gas Processors Limited (PPGPL) and the NGC CNG Company Ltd. Together, in the Group portfolio includes 1,000 km of pipeline infrastructure, both on land and offshore, as well as industrial sites and port and marine infrastructure, all of which they have used to expand and support their operations. Like all such companies, NGC remains subject to supply and availability,

359 Lazzari Street Palmiste, La Romaine, Trinidad & Tobago W.I. Tel/Fax: (868) 222-1621 Cell: (868) 376 – 0482 sales.sealtech@gmail.com

Suppliers of Engineered Equipment and Services to users of Rotating Equipment, Pumps, Compressors, Valves, and Process Equipment.

but when supply is available, these pipelines are capable of transporting more than 5 billion cubic feet of gas per day, making this one of the largest capacity systems in the world.

NGC work as managing operators over this pipeline network, concentrating on the compressing, purchasing, transporting and selling of natural gas to industry-based clients both upstream and downstream. This requires operations in both the transportation and logistics, and also the marketing fields. NGC’s journey all started in a small office on Abercromby Street, before moving to Pembroke Street in the country’s capital, Port of Spain, under half a year later.

THE NATIONAL GAS COMPANY OF TRINIDAD AND TOBAGO With an TT$80,000.00 advance from the government - a small

condensate processing facilities. The centralised facility is complex

amount for the task, even in 1975 – NGC helped in the supervision

because of its location at this intersection, requiring it to receive

and construction of the 23-mile pipeline from Beachfield to Picton.

gas from different sources and therefore creating the need to

In 1976, they also operated and maintained a 44-mile pipeline

facilitate the integration, bypassing and separation of these gases.

system from Penal to Port of Spain. The latter was valued at TT$12

Along with the Beachfield complex and its impressive

million. Two years later, they also took on responsibility for a

slug catcher is NGC’s 56-inch Cross Island Pipeline (CIP). The

pipeline valued at TT$68 million, as their value, reach and output

76.5-kilometre CIP, which was completed in 2005, is the largest

grew. Total gas sales for 1978 came to 150 MMscf/d.

diameter gas pipeline to be constructed in the Western Hemisphere,

As with the gas industry the world over, the 1980s saw a

with a capacity to deliver approximately 2.4 Bcf/d. The line was

period of growth and expansion for NGC; the company had

constructed parallel to the existing southern pipeline Right of Way

many new pipelines laid for both land and sea, and made several

(ROW), which runs from the southeast coast at Beachfield to Point

major investments in the upstream, midstream and downstream

Fortin on the southwest coast. The first gas flowed into the pipeline

sectors. Out of their more recent developments, some of the most

on November 25th 2005, heralding the successful commissioning

significant have taken place at Beachfield. Beachfield is a focal

and tremendous effort of NGC, its contractors and suppliers to

point of transmission lines - a spot where many pipelines fork

design, procure, construct, commission and deliver this mega-

outwards to locations across the country. The BUD slug catcher

project on schedule and within budget. This pipeline now supplies

and Beachfield Launcher Station have been game-changing

natural gas to the LNG trains at Atlantic LNG and industrial estates

additions to NGC’s operations there; as its name implies, NGC uses

at Union and La Brea in southwest Trinidad.

the launch station to launch pigs from Beachfield in the 24, 30 and

Trinidad and Tobago has not escaped the effect of the global

36-inch departing transmission pipelines, whilst the slug catcher is

gas depression. However, NGC’s subsidiaries provide a diverse

one of the company’s most important and complex natural gas and

portfolio for the company to create a ‘mixed bag’ of opportunities

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within the energy sectors, such as the development of industrial port infrastructure, and the production and marketing of NGLs (natural gas liquids), as well as continuing their history of investment in upstream gas and oil exploration. One of their subsidiaries, NGC CNG, offers consumers a cleaner alternative fuel (compressed natural gas, or CNG), which is odourless and non-corrosive as well as cheaper, greener and more efficient than traditional petrol and diesel fuels. PPGPL, another of their subsidiaries, works in cooperation with NGC; the company receives unprocessed natural gas from NGC, from which they extract the NGLs propane, butane and natural gasoline, and return a cleaner, better quality gas. PPGPL has also produced another income-earning opportunity for NGC in the form of TTNGL. TTNGL was incorporated on September 13 2013 by NGC to enable the public to participate in an Initial Public Offering (IPO) to own an equity interest in PPGPL. An APO was held, divesting NGC’s 40,248,000 Class B shares in TTNGL. The APO commenced on June 5th 2017 and ended on Wednesday June 28th 2017, where shares were offered to the public at a price of TT$21.00 per share.

This offer price resulted in a trailing dividend yield of 7.14% - the highest on the Trinidad and Tobago Stock Exchange. The shares

Damus is proud of its long standing

relationship with the NGC through which we have participated in some of Trinidad and Tobago’s most important projects including the Abyssinia Beachfield Accumulator Valve Station, Caroni Multi-Fuel Storage Depot, Tobago Cove Estate Facility and the Phoenix Park Valve Station. We wish the NGC abundant success and look forward to a continuation of our excellent business relationship.

THE NATIONAL GAS COMPANY OF TRINIDAD AND TOBAGO created tremendous excitement on the local stock market, earning

broaden their impact to all areas of community life, including many

endorsements across the financial sector during the three and half

projects supporting the arts, sport, education, Empowerment and

weeks of the offer. The Initial Public Offering of TTNGL shares in

Youth Development, and environmental preservation.

2015 was the largest local IPO. It was oversubscribed by 1.77 times,

It is this final area, given the potential environmental impact

and at that time, also invigorated the local stock exchange. NGC’s

of the energy sector, that is perhaps the most important and

effective ownership of PPGPL will be reduced from 63% to 52%.

commendable a focus for NGC. In recognition of the necessity

On top of these varied operations and business initiatives, NGC’s

for sustainable development, NGC not only donate towards

work in the Light Industrial Commercial Sector (LIC) addresses a

and support an extensive reforestation programme, but are also

much smaller but crucial group of customers.

conscious to keep their environmental commitment in mind

All in all, NGC and The NGC Group have many feathers in their

when making all of their business decisions. This includes opting

caps. Not only are they working to develop the energy sector in

for pipeline routes that will cause the least disruption and using

numerous directions, they have also pledged a portion of their profits

a process Horizontal Directional Drilling (HDD) to avoid cutting

towards a Community Relations Programme. In its early years, this

across the surfaces of natural habitats or under rivers, as well as

programme was nothing more than a commitment to donate to

other environmentally-sensitive water ways and bodies.

external charities, but over time, it has evolved into a full slate of

Since their inception, NGC have exhibited a history of planning,

events and resources assisted by NGC both financially, but also

commitment and growth. The gas industry experiences peaks and

through capacity-building, technical programmes and logistical aid.

troughs the world over, leaving no company immune, yet NGC have

In the 1990s, this took the form of programmes such as the Marine

continued to not only develop the infrastructure in place to keep

Environmental Awareness Programme, which taught residents of

up with the peaks, but have stood by their subsidiaries, investments

coastal villages essential life and survival skills for living by and with

and community in the troughs, going beyond gas to support a

the sea, including youth sailing courses. As the years have passed,

number of projects that not only build up the energy sector, but

these courses and support systems have continued to grow and

also the local lives and two islands it powers.