Trinidad and Tobago’s energy industry stretches across a range of upstream, midstream and downstream activities, including on- and offshore oil and gas exploration and production; oil and gas processing and refining, which produces petrol and other fuels; liquefied natural gas (LNG) production and export; pipeline operation and distribution; and the production of various petrochemicals, including methanol, ammonia, propane, butane, urea, fertilisers, natural gasoline, compressed natural gas and melamine. Given the sector’s central role, successive governments have had to review both the degree to which they should diversify economic activity out of the energy sector and the optimal degree of diversification within the energy sector.

Related to this second point is the question of how to define the optimal balance between exporting each product directly or retaining a proportion output for use as feedstock in the production of further downstream products. For the current administration and downstream operators, this decision-making process boils down to individual companies, their products and their markets.


One of these is state-owned Phoenix Park Gas Processors Ltd (PPGPL). PPGPL receives most of its gas feedstock from another state-owned firm, The National Gas Company of Trinidad and Tobago (NGC), and processes it at its facility in the Point Lisas Industrial Estate, extracting natural gas liquids (NGLs), which in turn are fractionated into propane, butane and natural gasoline and sold to downstream customers. Some natural gas is also received from Petrotrin’s Soldado offshore oil field, as well as some NGLs from Atlantic. In August and September 2015 a 19.1% stake in PPGPL was indirectly floated through an initial public offering (IPO) on the T&T Stock Exchange (TTSE). Prior to the IPO NGC controlled PPGPL through two of its subsidiaries, NGC NGL Ltd (with a 51% stake) and Trinidad and Tobago NGL Ltd or TTNGL (a holding company with a 39% stake). This structure has remained in place, with the IPO being achieved by the sale of a minority 49% stake in TTNGL. Around 76m TTNGL shares were offered at TT$20 ($3) each. The offer was 50% oversubscribed, raising the expected TT$1.5bn ($231m). The take-up was strong despite what analysts described as worries over gas prices, gas supply shortfalls and a difficult political climate.


At the time of the IPO, ratings agency CariCRIS lowered PPGPL’s credit score by one notch to “CariAA+”, down from “CariAAA”, reflecting what it said was an increased industry risk profile affecting all players, because of the general fall in hydrocarbons prices, which had led to lower levels of economic activity in T&T. The agency also cited downside risk because of the ongoing gas supply shortfalls, expected to last for another one to two years until 2017-18 when new gas projects like Juniper are due to come onstream. Although company revenue and after-tax profits were down in 2014 by 13.8% and 17.8%, respectively, to $696.8m and $166.6m, a trend that was expected to continue in 2015, the ratings were still supported by good liquidity, debt-servicing metrics and the sector’s low-operating costs. Downside factors included the ongoing gas supply shortfalls, low capacity utilisation at the fractionation plants and growing competition. On the last point, the company’s market share for liquefied petroleum gas (LPG) supply in the Caribbean and Central America has shrunk from 60% in 2007 to 8.7% in 2014, although LPG export volumes have not been proportionately affected. This was mostly due to a greater export concentration in the Caribbean market, where PPGPL has maintained a majority position, as opposed to Central America, where a significant portion of market share was lost to US companies.

Nevertheless, the expansion of LPG supply associated with the shale oil and gas revolution in the US is starting to become a looming threat to PPGPL.

PPGPL acting president Dominic Rampersad told OBG that the company was adjusting to the low-price environment by carefully managing its safety systems, managing costs, maintaining employee motivation and keeping alert to new business opportunities. Cost management, rather than abrupt cost cutting was a key part of his philosophy. He cited the need to think of expenditure on maintenance and safety as an investment to be continued in both good times and bad. Rampersad was optimistic about demand for LPG in PPGPL’s natural Caribbean market, largely driven by a buoyant tourism sector. PPGPL’s in-house port facilities, traditionally configured to function only in export mode, had been modified to allow both export and import of liquids. “We are looking at a strategy of becoming a wholesaler, buying certain products in bulk, breaking bulk into smaller packages and reselling in smaller consignments to our existing markets,” Rampersad told OBG.

Downstream Ecosystem

With the exception of Petrotrin (see overview) a number of other companies forming part of the downstream ecosystem continue to operate profitably even in difficult market conditions. Atlantic operates four liquefaction trains at its plant at Point Fortin with total capacity of around 14.8m tonnes per annum (tpa) – it is one of the world’s largest LNG exporters. BP and Shell are among Atlantic’s key shareholders. Meanwhile, privately owned Methanol Holdings (Trinidad) Limited (MTHL) uses natural gas to produce up to 4m tpa of methanol. Methanol’s main uses are as a feedstock for the production of other chemicals used in the manufacture of plastics, plywood, paints, explosives and textiles. MHTL also produces a solution of urea and ammonium nitrate (used in fertilisers), urea and melamine (used in adhesives).

Mitsubishi Green Light

In September 2015 Caribbean Gas Chemical Limited (CGCL), a joint venture between Mitsubishi of Japan and local partners NGC and Massy Group announced the final investment go-ahead decision on a nearly $1bn project to build a chemical plant at La Brea in south-west Trinidad capable of producing 1m tpa of methanol and, in the initial phase, 20,000 tpa of dimethyl ether (DME). Should DME consumption increase, this could subsequently be increased to 100,000 tpa. The total cost of the project is $990m, with the Japan Bank for International Cooperation funding a total of $485m of that amount. The new plant is expected to be online by March 2019. Kamala Persad-Bissessar, the country’s then prime minister, told energy executives in September 2015 that “by the year 2019 the world will need an additional 27m metric tonnes of methanol. The construction of this plant means that T&T will be playing its role in meeting the demand for methanol”.

Ground construction has already started on the plant’s site and the authorities are eager to promote the use of DME as a substitute for diesel and LPG fuels. Jimmy Mphelane, managing director of French-owned Air Liquide Trinidad and Tobago – a company which produces liquid oxygen, nitrogen and argon – said that T&T offered many benefits as a base of regional operations, including political stability, technical competency and lower energy costs. However, market conditions in early 2016 were tough – the voluntary closure of the Arcelor Mittal steel plant had reduced Air Liquide sales – but Mphelane argued that the long-term development of additional energy-linked downstream industries, such as petrochemicals, gas processing and steel would be beneficial. He cited the CGCL plant as one way forward in terms of stimulating economic growth and stressed the importance of talks with Venezuela on the potential joint exploitation of gas in the Loran-Manatee field.

Resolving gas supply shortages would open the doors to further downstream development. “I think companies that target downstream such as urea and melamine are on the right track. T&T needs to look at going beyond basic chemicals and consider downstream industries such as propylene, acrylic acid and so on. This will further enhance the value chain and maximise the local content,” Mphelane told OBG.