NGC: Gas critical to Trinidad & Tobago’s prosperity [LNG2023]
In NGC’s view, what role does natural gas have in delivering Trinidad & Tobago affordable, reliable, and clean energy?
Unlike most Caribbean hydrocarbon producers, Trinidad and Tobago has a well-established energy industry and is one of the largest producers of natural gas in the Caribbean. While the energy sector has been an essential component of Trinidad and Tobago’s economy for decades, since the 1990s our natural gas production has been the more significant contributor to our economy between oil and gas. Because of its abundance and low cost, we’ve been able to use natural gas to power our economy, generate our electricity and make Trinidad and Tobago an attractive location for gas-based industry. Natural gas is the cleanest and most economical energy source for us because it emits less carbon dioxide than other fossil fuels such as diesel, fuel oil and oil. That is not so for others, but it has worked out for us.
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Even now, in a more mature natural gas sector - one that is in the midst of an energy transition incorporating renewable energy while consolidating the gains from our past, the energy sector - of which gas and LNG are the major component –accounted for about 29% of GDP in 2022 and around 40% of government revenue. By itself, natural gas was just over 28% of exports in 2022; when you add petrochemicals to the mix, that total rose to 67%.
The short answer is - a central role, and an irreplaceable one. We would not be here if not for natural gas.
How does the company see that role evolving as the energy transition progresses?
Regarding the evolution of NGC’s role in the energy transition, we will still be in the natural gas business as we see natural gas continuing to have an integral role in the transition to cleaner fuels. There is an additional dimension where we must adapt how we do things to prepare for our future world, and this includes new lines of business, greater collaboration, using our existing energy more efficiently, and educating our stakeholders on the imperatives that must inform our energy transition.
The transition era calls for greater collaboration among our stakeholders. Upstream, we are in active collaboration with oil majors like BP, our non-operated joint venture partners, and smaller onshore independent oil and gas producers (Heritage and Touchstone). Downstream, we focus on energy efficiency (EE) and engage in active gas management with the Trinidad and Tobago electric power distributor, natural gas producers, gas consumers, along with our line Ministries.
NGC and its subsidiaries are expanding its business beyond natural gas to other forms of clean energy, building a portfolio of energy assets that support the global transition to a low-carbon future. As part of the latter, our subsidiary National Energy is working with the IDB on Trinidad and Tobago’s hydrogen road map, where energy requirements for future green hydrogen will be fulfilled using renewable offshore wind. Plans are also in train to expand the delivery of LNG to regional Caribbean markets by operationalizing small scale LNG and exploring supply and demand solutions with these countries.
In addition to this, NGC has committed to an extensive programme of operational and strategic activities that we call our Green Agenda. Through this agenda, we focus on several areas of activity that also are aligned to national and global sustainable development goals. Initiatives in the Green Agenda encompasses strategy, operational activities, as well as work with stakeholders (including civil society) and partners that share our aims for economic, operational, social, and environmental sustainability. As part of executing the Green Agenda, we are in the process of embedding the Green Agenda into corporate and individual performance objectives, overall corporate reporting, and the organizational structure of the Group. Activities include greenhouse gas (GHG) reduction; methane mitigation; carbon capture storage, reduction, and use; green financing initiatives; influence – the use of moral suasion on our fellow companies in the Trinidad and Tobago energy sector. renewable energy initiatives; fuel switching; food security; and climate adaptation and mitigation. Each broad objective has sub-objectives. For example, under methane, we have plotted an internal path to reduce our operational emissions of methane by the year 2025, while supporting the efforts of our industry colleagues to do the same.
Regarding our public awareness and knowledge transfer – this includes broadcast programmes on television and other traditional media, also using social media. Our Small steps to Change and New Energy Conversations are two initiatives that we are currently carrying out, and we reinforce these learnings through our mobile apps (available to the public) as well as through targeted education and training interventions (NGC and NE).
Part of that advocacy and influence include a leading position on the sustainability sub committees of the Trinidad and Tobago Energy Chamber, an advocacy role among Point Lisas companies (many which are our customers), and a role in the Trinidad and Tobago National Council for Sustainable Development. It includes presentations to our Parliament and targeted participation and engagement in local, regional, and international forums, including workshops and conferences. Engagement with our Green Agenda continue to evolve and gain traction in Trinidad and Tobago and the Caribbean.
NGC has long recognised the need for transformative-thinking and looking beyond its traditional business model and current energy mix to create real impact within the clean energy space. It is well-positioned to take leading role as the energy landscape transitions to a low-carbon energy future.
Can you take us through NGC’s own work in reducing emissions associated with the natural gas value chain, as well as its involvement in other areas such as biogas?
About a third of the planet’s current heat retention is due to methane. The problem with methane emissions is that you can’t see them the same way you can see CO2 coming from the ammonia plants. Methane emissions come from wetlands, fossil fuel industries, landfills, leaks in the gas value chain and to some extent agriculture. The fossil fuel industry contributes a quarter of the emissions.
The methane issue is becoming very important because as a greenhouse gas it has 80 times the global warming potential of carbon dioxide on a 20-year timescale. The permafrost is melting, and methane is being released, and this traps more heat which further melts the permafrost, which then releases more methane. If we don’t solve the methane issue, we can’t solve the longer-term issue. NGC has formed partnerships to use satellites to monitor methane emissions.
A lot of the conversations now are about identifying the methane, measuring emissions, reducing them, and reintroducing them into the pipelines. We’ve partnered with Orbital Eye and GHGSAT to look at Trinidad and we’re having those conversations about how to capture the emissions in the sky from Heritage, Touchstone and so on. On the ground, we’re using infrared cameras now to see plumes coming from valves and other leak sources so we can address those leaks.
The Oil & Gas Methane Partnership involves 70 companies across the world, and NGC is one of them. As a member of OGMP, we must report our measurements of methane. NGC’s membership means all our operating partners must also report. We have already achieved the OGMP Gold Standard of reporting, because of our elaborated commitment to reduce methane emissions over the next three years.
Our work in biogas is still at a nascent stage. Despite this, progress has been made. In September 2001 the Trinidad and Tobago Solid Waste Management Company Limited (SWMCOL) signed a Memorandum of Understanding with National Gas Company, and two of its subsidiaries (National Energy and NGC CNG) to capture and utilise landfill gas. The MOU will explore opportunities to capture and commercialise landfill gas for the provision of carbon-negative, renewable compressed natural gas, and other uses. Through this partnership with SWMCOL, The NGC Group will seek to identify and quantify methane emissions from existing landfills and determine ways to monetise this undervalued source of biofuel and green energy. Additionally, captured methane emissions can potentially be used to fuel SWMCOL’s fleet of vehicles and other official government fleets. The agreement signals the Group’s commitment to driving sustainability through strategic partnerships that will leverage opportunities of innovation in carbon capture.
What competitive advantages does Trinidad and Tobago LNG have on the global market?
Trinidad and Tobago traditionally had a competitive advantage in the LNG industry due to its location and access to low-cost resources. Regarding the former, Trinidad and Tobago’s location advantage for LNG sourced from the Atlantic Basin to Asia (via the Panama Canal) and possible future LNG markets in South Africa remains.
In terms of secure and stable supply sources, Trinidad and Tobago remains a stable, secure, and safe source of natural gas as LNG for Latin America, Europe, and Asia. Within the Caribbean region and southern Central America, the location remains a source of reliable natural gas. More importantly, for Caribbean countries transitioning from diesel/HFO to some combination of ICE spinning reserve and renewable options, Trinidad and Tobago LNG remain best poised to take advantage of any potential markets arising from that transition.
Finally, Trinidad and Tobago can be the conduit that frees up what is effectively stranded natural gas resources from northern South America for global markets to access and use by virtue of available nearby infrastructure to convert that gas to LNG.
Insufficient gas feedstock has been an issue both at Trinidad and Tobago’s liquefaction trains and in its petrochemical and fertilizer industries. How can the country ensure greater investment in gas supply?
Our gas market can be characterised as a finely tuned balance between gas demand and gas supply, consistent with Trinidad and Tobago being a mature gas province.
NGC’s role in bringing new gas investment projects onstream (and ensuring the continued operations in existing gas using plants) is by securing reliable gas supplies for our customers at a price mutually beneficial to all parties, as much as is practicable. Through these negotiations, oil and gas operators have the impetus to exploit and develop gas fields that may be present in acreage offered through bid rounds by knowing that there is a ready market for the gas produced. Acreage successfully bid for is subsequently developed via work programmes agreed to between the Ministry and successful bidders. This process ensures that the search for new fields and reserves takes place continuously.
Our initiatives in this market environment are centered about increasing gas supply availability through diversion of gas (the ongoing Project Lara solar projects should free up some of the gas molecules currently used to generate electricity), sourcing cross-border gas (the Dragon initiative and other potential initiatives) small scale LNG for Caribbean gas supply, exploiting small pools of natural gas that would otherwise be stranded, in addition to natural gas supply allocation to users in line with gas availability.
We also provide an informed and professional perspective as part of our “driving the conversations” around best practices in ensuring that Trinidad and Tobago remains competitive. This includes initiatives around the creation of a sustainable hydrogen economy in Trinidad and Tobago. As one example, in 2021, we signed a memorandum of understanding (MoU) with National Energy and Kenesjay Green Limited (KGL) to work collaboratively on the creation of a sustainable hydrogen cluster as part of the Trinidad and Tobago energy sector, and we remain committed to that partnership with the progressing of that initiative.
This interview was originally published in the LNG2023 Daily, produced by NGW during the LNG2023 conference in Vancouver July 10-13.