Mark Loquan, President, National Gas Company (NGC) of Trinidad and Tobago: Interview

Mark Loquan, President, National Gas Company (NGC) of Trinidad and Tobago

Interview: Mark Loquan

To what extent can further regional integration foster growth in the natural gas market?

MARK LOQUAN: T&T’s production is largely dominated by shallow-water fields that have either been totally depleted or are already in production. To maintain current production levels and increase them in the medium term, our strategy is to turn towards local deepwater platforms, as well as tap the remaining smaller marginal and stranded fields. The latter imply a high level of cross-border initiatives, since most of these reserves lie outside our jurisdiction. In this vein, Grenada and Venezuela appear to be the likeliest sources of new gas production that can be added to our overall supply. Both the Grenadian and Venezuelan cross-border initiatives will begin to see benefits in the medium term. For instance, Grenada has thus far drilled one well, and a series of programmes for further drilling are expected in early 2019. Optimal gas production and subsequent imports can be expected in the beginning of the 2020s.

The sector has actively been looking at marginal and cross-border fields because it has been acknowledged that they play a greater role than initially thought in adding supply to the overall plateau situation.

Will T&T be able to surpass its 2010 peak production of 4.2bn cu feet of natural gas in the near future?

LOQUAN: Returning to 2010 peak production levels will certainly not happen in the short term. From a downstream perspective, all the new announced projects, such as Savannah, Macadamia and Angelin, will only serve to fight the production decline in Juniper, a field that just came on-line again in 2017. Only with the addition of external resources, stemming from marginal and cross-border fields, will we realistically be able to meet or even surpass 2010 production levels.

The decline in production of recent years comes as a result of depleting fields and a lack of upstream investments that should have happened gradually over the past decade but did not materialise. A noticeable drop in production translated into a supply deficit, which made demand for gas exceed production for the first time in T&T. Despite the big surge in upstream activity in 2017, most of it will only help in keeping liquefied natural gas (LNG) and downstream production stable, but the recent increase does not provide the necessary room for more growth.

The potential of increased gas flows from Venezuela, combined with the prospect of additional active rigs and discoveries in Grenada, appears to be the only solution to increase production levels over a longer time horizon. We are undertaking concerted efforts to make this a reality as soon as possible; ideally, additional gas supply should flow into T&T by the beginning of the 2020s. It is difficult to be more specific than that, particularly given the level of uncertainty and external factors that must be taken into account.

How is the T&T natural gas market structured, and in what ways does this influence the value chain?

LOQUAN: NGC has maintained its role as the sole aggregator of non-LNG hydrocarbons in T&T, a role confirmed by the government. I believe such a position allows NGC to ensure that gas molecules are optimised across the value chain, acting as an intermediary between the upstream and downstream segments of the market. The intermediary role is particularly relevant for downstream plants: whenever there is a shortage of supply, a sole aggregator can optimise operations by reducing potential disturbances to downstream production, which sometimes result in a temporary total shutdown of production.

Due to its position as an exclusive aggregator, NGC can find effective solutions to problems, and balances interests when upstream and downstream contracts are about to be renegotiated or renewed. NGC also ensures a continuous flow of gas to plants, thus avoiding the cyclical disruptions experienced in the past.


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The Report: Trinidad & Tobago 2018

Energy chapter from The Report: Trinidad & Tobago 2018

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