Trinidad and Tobago’s natural gas shortage has worsened and has led to Atlantic LNG’s (ALNG) production being down by close 30% this year. Even worse, the company’s Chief Executive Officer Nigel Darlow has signaled that in 2017 production is projected to be down by 35%.
“[ALNG] is suffering very badly from big gas supply shortages on a scale we have never experienced before,” Darlow said. “Year-to-date 2016, [ALNG] has suffered on average over 30% gas supply shortage and there is no significant improvement in the foreseeable future. In fact, 2017 is predicted to be worse still with overall gas shortage close to 35%. It is very serious for us, equating to something like 75 LNG cargoes lost each year. [ALNG] is suffering the vast majority of gas supply shortage in the country.”
With a capacity of 15 million tonnes/year of LNG this means ALNG’s production is now down to about 10.5 million tpy.
Speaking at a recent HSSE conference in Port of Spain, Darlow said the low gas supply was impacting daily operations to the point where ALNG faced daily challenges in continually turning turbines and compressors “up and down, and on and off.”
He said, “That’s not how they were designed, we need to understand the impact that this is having on our operating envelope and our maintenance requirements and on our plant and on our equipment. We must ensure that the low levels of plant utilization do not present process safety risks which are not fully understood and properly managed.”
With increasing competition expected from the US and expanded production in Australia, Darlow said ALNG was not concerned about LNG emanating from the US because of its low cost structure, its only concern was the availability of gas.
He said with FOB costs about 50% less than the FOB cost for some of the new US LNG producers, ALNG is one of the lowest cost producers of LNG globally.
“[ALNG] can deliver LNG at significantly less cost than the much talked about new US and Australian plants,” Darlow said. “So yes, [ALNG] and Trinidad [and Tobago] will always be able to compete globally in LNG. That said, we have a responsibility to ensure we continue to spend money so that our operations are always as safe as they reasonably can be.”
Trinidad and Tobago’s gas production has fallen from 4.2 bcfd in 2010 to 3.4 bcfd. It is however expected to add an additional 1 bcfd by November 2017 when several projects including the BPTT 575-MMcfd Juniper field starts producing.
Already several downstream producers including Methanex have complained that their production is down 20% because of gas curtailment while Caribbean Methanol Co. has shut down one of its melamine plants due to the shortage of gas.
Trinidad and Tobago is the largest exporter of methanol in the world, the largest exporter of ammonia to the US, and the world’s sixth-largest LNG exporter.