| PORT OF SPAIN, Trinidad
PORT OF SPAIN, Trinidad Feb 26 Trinidad and
Tobago is turning to markets in Latin America and the Caribbean
for sale of its natural gas as its exports to the United States,
once its major customer, quickly decline in the face of the
North American shale gas revolution.
Energy Minister Kevin Ramnarine said Trinidad and Tobago has
a lucrative role to play in regional energy security through the
export of its natural gas.
"Our Caribbean and Latin American neighbors are buckling
under the weight of high oil prices that have impacted on their
balance of payments and contributed to high prices for
electricity and transportation fuels," he told an energy
conference in Port of Spain last month.
Gasfin, a U.K.-based company that develops mid-size LNG
plants, signed a Memorandum of Understanding with the Trinidad
and Tobago government last year to build a $400 million LNG
plant producing 500,000 tons annually to supply Caribbean
Centrica, another British firm, plans to begin
development of its Block 22 acreage which is estimated to
contain up to 1.3 trillion cubic feet (37 million cubic meters)
of gas, and the proposed option for the commercialization of the
gas includes a compressed natural gas (CNG) plant.
Ramnarine said the CNG facility gives smaller markets in the
Caribbean the option of moving out from diesel or fuel-oil based
Trinidad and Tobago's energy sector contributes more than 40
percent of GDP and 70 percent of foreign exchange earnings,
selling natural gas to the Dominican Republic, Puerto Rico and
recently to Argentina and Chile.
The twin island republic is also eyeing Panama and Costa
Rica which are both preparing to build re-gasification terminals
as they make the switch to LNG.
Trinidad and Tobago's LNG exports to the United States used
to account for 80 percent of its exports, but that is falling
LNG shipments to the United States accounted for only 19
percent of total exports from October 2011 to May 2012,
declining from the 22 percent in the corresponding period a year
earlier, according to the government's Review of the Economy
Trinidad and Tobago, however, still provided 50 percent of
all U.S. LNG imports in the 2011/2012 period.
The decline in exports was blamed on the increasing
extraction of shale gas in the United States, as well as the
consequent softening of the Henry Hub pricing point for natural
gas futures contracts traded on the New York Mercantile Exchange
Trinidad and Tobago, which currently holds 6 percent of the
LNG market and ranks sixth in the world for LNG exports, also
sells on the spot markets in Europe and Asia to diversify
its LNG export markets and benefit from higher prices in other
Dr. Anthony T. Bryan, a senior associate at the
Washington-based Center for Strategic and International Studies
(CSIS), said as U.S. access to its own natural gas resources
increases, there will be less need for LNG from Trinidad and
Once the United States has satisfied its domestic needs, it
will also be in a position to compete with Trinidad and Tobago
in the 21 countries across the E.U., Asia and Latin America that
the Caribbean country now supplies.
"The only U.S. threat to Trinidad and Tobago in the short
term is Cheniere Energy which is the only company that
has permission from the U.S. Department of Energy to build LNG
trains at Sabine Pass," he told Reuters, referring to the deep
water Gulf Coast terminal at Port Arthur, Texas.
Bryan said lower demand for U.S. LNG has turned out to be a
blessing by allowing Trinidad and Tobago to seek deals and much
higher prices from energy-hungry customers in Asia and South
"The global gas market's increasing demand will be another
blessing for Trinidad and Tobago. Natural gas is the fuel of the
future," he said.
Global LNG production is growing significantly at 4.3
percent per annum and is expected to account for 15.5 percent of
global gas consumption by 2030, according to Andy Hopwood, chief
operating officer for Strategy and Regions for BP Plc.
Hopwood notes that there has been a trend of diversification
of LNG trading partners for both exporters and importers.
"This is good news for Trinidad and Tobago as diversified
LNG markets reduces your dependence on any single market. In
hindsight, diversifying away from the U.S. was a very wise move,
one that will give the country much greater stability for its
export revenues going forward," he said at the energy
"This country's importance in the world's energy markets has
not been blown away by the 'shale gale' or any other change in
the global energy market," he added.