PORT OF SPAIN (Reuters) - Trinidad and Tobago’s Prime Minister Keith Rowley on Tuesday called on the Gas Exporting Countries Forum (GECF) to develop and implement a gas pricing index to ensure members receive adequate returns on the sale of the hydrocarbon.
As gas supplies become increasingly available for consuming countries through Liquefied Natural Gas (LNG) imports, producers aim to secure revenue from exports by encouraging what they consider to be fair pricing.
In a meeting in Bolivia last year, members of the GECF including prominent producer Qatar called for greater competition in the gas market and held talks with producing company chief executives to discuss pricing methodologies.
“Now more than ever, the need for such a global reference price is evident, in order to protect both producers and consumers alike,” Rowley said at the opening of GECF’s 20th Ministerial Meeting in Port of Spain.
Natural gas consumption grew 3 percent to 3.67 trillion cubic meters last year, pushed by bigger demand in Europe, the Middle East, Africa and Asia-Pacific, according to BP’s Statistical Review of World Energy.
But production increased at a higher rate, underlining a buyers’ market that continues stopping prices indexed to the U.S. Henry Hub from growing to levels acceptable to producers.
Prices at the Henry Hub have recently recovered from levels below $3 per million British Thermal Unit (BTU) in the last four years to surpass $4 per million BTU in November. But the U.S. Energy Information Administration last week forecast downward pressure on prices to an average of $2.98 per million BTU in 2019.
Trinidad and Tobago, where gas production has declined since 2010 to nearly 34 billion cubic meters last year, has been suffering “leakage of value” of its gas exports as traders take advantage of relatively low price benchmarks, Rowley said.
“Very little of the returns from high global LNG prices makes its way back to Trinidad and Tobago. This cannot be allowed to continue and as such. The current system must be reviewed,” Rowley added.
Reporting by Linda Hutchinson, writing by Marianna Parraga; editing by Tom Brown