Trinidad and Tobago accelerates use of natural gas for automotive industry

A large-scale incentives programme and stronger infrastructure backbone are driving government plans to promote vehicles powered by compressed natural gas (CNG).

In mid-July the Private School Transport Association of Trinidad and Tobago (PSTATT) added two new CNG-fuelled minibuses to its fleet, as part of a TT$3.6m ($531,880) incentives programme introduced late last year by National Gas Company of T&T (NGCTT) subsidiary NGC CNG.  

Set to run until the end of 2018, the programme offers PSTATT school bus drivers who buy a new original equipment-manufactured (OEM) CNG vehicle TT$15,000 ($2214) in fuel money for two years. In addition, TT$7500 ($1107) of free CNG is available to each driver that chooses to convert their vehicle to CNG.

NGC CNG also offers incentives to operators of maxi taxis, which are privately owned vehicles providing minibus transport, and regular taxis. A total of 1200 grants of between TT$45,000 ($6690) and TT$75,000 ($11,150) are available for maxi taxi owners who replace or convert their vehicles. The programme also offers up to TT$5000 ($741) of free CNG per vehicle, administered through a fuel card. For taxi drivers who convert, TT$5000 of CNG per vehicle is available.

In addition to offering cash for new and converted vehicles, the government has also announced tax breaks to encourage the take up of CNG, removing value-added and motor taxes from the import of all OEM CNG vehicles and a 25% tax credit for conversion costs up to TT$2500 ($370) per vehicle.

The government’s decision to scale back fuel subsidies, bringing local petrol and diesel prices up to international market rates by 2018, is also likely to speed up the adoption of CNG by the transport sector. In addition to making CNG more appealing as a fuel source, the move is also aimed at reducing budgetary outlays.

Infrastructure projects given green light for CNG transition

With the incentive of free CNG likely to accelerate demand for the fuel, the government is fast-tracking the rollout of infrastructure to support CNG-powered cars.

As part of the 2017 budget, seven new CNG refuelling stations were set to open, adding to the 10 existing ones. However, in mid-July NGCTT said it expected to launch 13 new stations this year, with three already in operation as of June. The government’s aim, according to the 2017 budget statement, is to construct a total of 72 CNG stations.

Government aims to see CNG-fuelled vehicles on road by 2018

T&T has invested more than $74m in the initial phase of a larger $295m project to reduce the number of petrol- and diesel-fuelled vehicles on the country’s roads by replacing them with 17,500 CNG-powered vehicles by 2018.

The move to CNG-fuelled transport has been advanced by a fall in government revenue from low oil prices and adherence to cleaner energy requirements in the Paris Climate Change agreement, Colm Imbert, minister of finance, said in his 2017 budget speech made in September of last year.

Juniper and TROC come on-stream, boosting local gas production

T&T’s move to encourage the use of CNG is underpinned by new deposits of gas coming on-line to help meet the country’s fuel needs.

In mid-August BP T&T (BPTT) announced that its offshore Juniper platform began producing gas from the Corallita and Lantanas deepwater fields, which are expected to add 590m standard cu feet per day to the country’s output.

A further boost to local production came in April, when the Trinidad Onshore Compression Project (TROC) was brought on-stream. The project, which is being implemented by BPTT in association with domestic company Atlantic and the National Gas Company, will increase output and operational life from ageing wells.

TROC uses a compressor installed at the Atlantic liquefied natural gas (LNG) facility at Port Fortin to reduce pressure running through NGC and BPTT pipelines, providing a boost to gas availability from BPTT’s wells in the Columbus basin.

Increased upstream activities set to have positive macroeconomic effects

In addition to the transport sector, T&T’s larger economy should benefit from the new supply of natural gas by BPTT’s newly operational fields and TROC.

In its May economic outlook, the Central Bank of T&T forecast the economy would make a modest recovery in the second half of the year on the back of the output from Juniper and TROC.

“The additions to natural gas production will be welcomed by the downstream LNG and petrochemical industries, which will benefit from more reliable gas supplies for their operations,” the bank statement said.

Along with providing cleaner and cheaper fuel, converting domestic transport stocks to CNG should free up more liquid fuels for T&T’s export markets, helping to maintain foreign exchange earnings.

Pivoting away from conventionally powered vehicles will hurt sales of imported cars and commercial vehicles and impact local dealers. However, this could be somewhat offset by rising demand for CNG units, as well as an increase in work for the automotive segment through the provision of conversion services.

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