Prime Minister Rowley’s Statement at the Sixth Summit of Heads of State and Government of the Gas Exporting Countries Forum (GECF)
It is my pleasure and honour to participate in this the 6th Summit of Gas Exporting Countries and to extend on behalf of the delegation of Trinidad and Tobago our heartfelt appreciation for the gracious welcome and hospitality provided by H.H Sheikh Tamim bin Hamad Al Thani, Amir of the State of Qatar, the Government and people of the State of Qatar.
Honourable Heads of delegations and your participating delegations please accept the respect and best wishes of the people of Trinidad and Tobago.
As a country that has been impacted by the Covid-19 pandemic, Trinidad and Tobago can identify with the theme for this year’s Summit, “Championing Natural Gas for post-COVID-19 recovery and sustainable development”. Pre-Covid-19 the domestic energy sector based on the Government’s strategies was enjoying a major upturn. The pandemic curtailed this momentum by delaying the implementation of new upstream projects.
The issues brought on by the pandemic have been managed by the Government in collaboration with the upstream and the recovery is on track. As a consequence, several upstream projects, primarily gas projects came on stream in 2021 and a number of gas projects are in the pipeline for 2022. In the medium to long term several gas projects are in the appraisal and sanctioning phases. These include deep-water projects with estimated gas reserves of 6.6 trillion cubic feet and the Manatee cross-border field, which adjoins the Venezuelan Loran field. I wish to thank and place on record our sincere appreciation for the co-operation of the Government of the Bolivarian Republic of Venezuela in agreeing to the independent development of these cross-border fields. It is this spirit of co-operation that will serve to strengthen and sustain the GECF as the leading energy organization in the global gas market.
Natural gas has been the cornerstone of our economic development from the mid-1980s when gas superseded oil as the primary hydrocarbon. Natural gas plays a critical role in supporting our petrochemical and Liquefied Natural Gas (LNG) industries. Trinidad & Tobago has ten (10) Ammonia Plants, seven (8) Methanol Plants and four (4) LNG Trains, all of which depend on natural gas as the primary feedstock.
The transitioning of primary energy sources is not a new phenomenon. The Industrial Revolution has seen a shift from coal to crude oil and natural gas.
The reality is that oil and gas will continue to play a significant role in meeting global primary energy requirements for the foreseeable future.
It is in this scenario that Trinidad and Tobago’s gas industry is positioned.
A viable and sustainable petrochemical sector is important to our economy. However, there are challenges. On one hand, upstream producers have been requiring higher prices to adequately compensate for the higher production costs associated with operating in a mature hydrocarbon basin. On the other hand, we have a mature downstream petrochemical industry operating in a competitive global environment. To better understand and address the challenges and opportunities within the sector the Government of Trinidad and Tobago, has engaged the UK firm Gas Strategies Group Limited. The mandate of the Group is to evaluate the gas value chain and to provide proposals for changes in policies, structure, regulation and governance of the gas value chain to sustain and maximize the value to the country from its gas resources,
Prior to the advent of the shale gas revolution, the USA was the principal market for LNG. The USA is no longer the principal market as Trinidad and Tobago LNG has been directed to a wider spectrum of markets. However, the majority of contracts are still based on Henry Hub, the US market price. This situation is to the disadvantage of Trinidad and Tobago.
The country’s 2015 Gas Master Plan Report prepared by UK Consultants Poten and Partners confirmed that the country lost US billions in potential revenue from LNG exports. The Government has been having dialogue with companies to ensure a more equitable sharing of LNG revenues. We now have an opportunity to correct this inequality consequent on the pending expiration of LNG licences and plans to restructure the LNG business in Trinidad and Tobago.
It is in situations like this that the value of the membership of Trinidad and Tobago in the GECF takes on added significance. The experience of the Forum which possesses 70% of the world’s proven gas reserves, 44% of its marketed production, 52% of pipeline, and 51% of LNG exports in the world is formidable and can be of immeasurable benefit to members. However, if we are to maintain our leading position in the global gas market in this changing environment there must be meaningful collaboration and co-operation at all levels. Given what is at stake I am confident that we will coalesce and continue as a cohesive force in this dynamic environment.
Global gas and LNG markets have been undergoing structural changes, fluctuating between periods of convergence as well as divergence when oil prices are high. This volatility makes budgeting, for sovereigns, extremely difficult. The GECF Global Gas Model is a valuable tool which can assist member countries such as Trinidad and Tobago in navigating this price volatility.
The domestic energy sector will continue to drive the economy as we transition to a low carbon economy. However, as a small island state and an oil and gas economy we recognize our responsibility to transition to a local carbon economy according to a practical timetable driven by our own circumstances.
The cost of reducing our carbon footprint in keeping with our nationally determined contributions as per our UN Climate Change pledge is estimated at US$2.0 billion. Outside of international financing, revenue from our energy sector and in particular the monetization of natural gas, will be a major input in our transitioning to low carbon economy.
Natural gas is increasingly becoming the fossil fuel of choice. Natural gas is the clean and acceptable fossil fuel. It allows to shift from coal and oil to cleaner air and decarbonization. A key element to the increase in demand is a growing and more flexible liquified natural gas (LNG) market that has enabled global competition for gas supply.
While natural gas is the cleanest of the fossil fuels there is a need to reduce its emissions intensity by the elimination of gas flaring and purging, the wider implementation of leak detection and repair programmes to eliminate methane emissions, and carbon sequestration.
As the leading global gas organization, the GECF has to continue to take steps to entrench its international positioning by promoting dialogue between producers and consumers and broadening cooperation with the relevant intergovernmental and international organizations and entities. The GECF Gas Research Institute has an important role to play not only on behalf of GECF members but the international gas community in expanding cooperation in the development, deployment and transfer of advanced technologies in the gas sector, upstream, midstream and downstream.
It is my expectation that this spirit of co-operation that has been a hallmark of the GECF will intensify and be manifest in a tangible manner among the Members of the GECF. Natural gas the fuel of choice, is the medium that binds us together and which through our collective efforts can rise above the challenges and achieve the long-term goal of sustainability. Today’s deliberations provide us with an opportunity to set the stage for the action that can propel natural gas as a sustainable, reliable and economically viable global energy source. I look forward to the discussions and affirm Trinidad and Tobago’s commitment to the active promotion of natural gas as a primary energy source in a low carbon future.
I thank you for your kind attention.