The regional maritime sector is a bit different and more complex than that in the US, hence it would be more difficult to capitalise on trans-shipment.

Ashley TAYLOR President POINT LISAS INDUSTRIAL PORT DEVELOPMENT CORPORATION

PLIPDECO’s expansion aspirations

June 1, 2018

Ashley Taylor, president of the Point Lisas Industrial Port Development Corporation (PLIPDECO), talks to TOGY about the domestic port logistics sector, the company’s expansion and diversification plans, and new opportunities related to environmental regulations. Plipdeco is 51% owned by the government of Trinidad and Tobago.

On the regional market: “It has been more difficult to capitalise on the benefits of trans-shipment based on how the countries have developed and what their requirements are. Brazil has about 40 ports and Colombia and Argentina have a number of ports as well. Venezuela has its own issues that would affect how cargo is handled. Because of this, the regional maritime sector is a bit different and more complex than that in the US, hence it would be more difficult to capitalise on trans-shipment.”

On clean energy opportunities: “More and more you will see vessels moving towards being powered by LNG. That fuel is much cleaner and reduces the cost of transportation, which presents a potential benefit for T&T as far as clean bunkering is concerned.”

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What are PLIPDECO’s plans for expansion at the Point Lisas Industrial Estate?
The current capacity of our port is about 250,000 teu. Up until 2015, we were rapidly approaching full capacity. After two consecutive years of record throughput, we reached 221,000 teu, but then we saw the dramatic fall in energy prices and, with the resulting effect on the economy, containerised volumes in 2016 dropped to 168,000 teu. In 2017, there was a further decrease to 161,000 teu. We have increased by about 2% year-to-date, but we expect the effect of the recession to still have an impact on our volumes.
The plan was to complete the port expansion on a phased basis over the next seven to eight years. However, even though the conceptual plans have been developed, we made a strategic decision to delay the major investment in our expansion programme at this point, due to the reduced throughput at the port.

What is PLIPDECO doing to maintain business in the meantime?
We made a decision to diversify our portfolio. We are moving from just being seen as a port to being seen as a logistics base. Being a port is part of our overall logistics and supply chain offering. For example, right now, we see growth in services, so we are constructing 140,000 square feet [about 13,005 square metres] of warehouse space in two phases. We are going to start the first 40,000 square feet [about 3,715 square metres] in H2 2018, with plans to finish by Q2 2019. During that time, we are going to construct the other 100,000 square feet [about 9,290 square metres].
All of this will complement our overall services offering in terms of leasing our warehouses and providing related services. With our existing warehouse, we are already providing the service to one major company on the industrial estate, and negotiations are ongoing with another for providing storage space and inventory management.
The strategy for warehousing is twofold: to provide support for companies based on the industrial estate and expand that to their upstream operations, and to provide warehousing support for local and international companies for the storage and consolidation of cargo.

 

What has prevented Trinidad and Tobago from becoming a regional centre for trans-shipment or transloading?
The US is one huge continent. The growth of the Panama Canal was sparked mainly by the demand for cargo on the US east coast, as well as for distribution further inland. That is the benefit of the Panama Canal in that region, and that has benefited trans-shipment.
This region is a bit more complex because there is a sizeable landmass close to the size of the US, but including several different countries with different ports and different requirements. It has been more difficult to capitalise on the benefits of trans-shipment based on how the countries have developed and what their requirements are. Brazil has about 40 ports and Colombia and Argentina have a number of ports as well. Venezuela has its own issues that would affect how cargo is handled. Because of this, the regional maritime sector is a bit different and more complex than that in the US, hence it would be more difficult to capitalise on trans-shipment.

With the delay of the Galeota port expansion, do you see Point Lisas becoming a hub for goods going to Guyana?
That is one of the strategies we are looking at. We do not foresee any major port development in Guyana for the next 10 years. Based on that and the draught restriction that country has when it comes to accommodating large vessels, we expect there to be a lot of opportunity for the movement of goods from Trinidad to facilities servicing the energy sector there.

Does PLIPDECO plan to deepen its draught to accommodate more oil- and gas-related operations?
The draught at Point Lisas varies depending on the berth. The largest berth has a draught of 11.5 metres. We would like to accommodate a lot of the larger vessels, but the largest-sized berth is also the most regularly-used berth and it is mostly used for containerised vessel operations. The smaller-sized berths with draughts of 8-10 metres are probably what we would be looking at to help support the oil and gas work that we are doing.
Right now, the ability to dredge further is limited for the simple reason that you could compromise the piles if you dredge lower than a particular depth.

How does Point Lisas contribute to Trinidad and Tobago’s global competitiveness and what other markets can you serve with your expansions?
When I speak about the energy part of it, I am talking about what is happening locally in Guyana. The port expansion, logistics and warehousing developments speak to a renewed focus on international trade. For the international component of logistics, what we are looking at in the long term, in the simplest form, is for products from China or the Far East to come to our facility and be deconsolidated, repackaged, reloaded into containers and sent to Latin America and other countries in the region.
We see our contribution to international trade from the point of view of substantially reducing the costs of transporting goods. It is much easier to ship something that is broken down and then repackage or assemble it, rather than ship something that is already a certain size, which drives up the costs of the goods due to higher shipping costs per unit. We are looking at an environment where we are trying to reduce emissions, our carbon footprint and the utilisation of fossil fuels. That is a bigger benefit.
With the new emissions rules regarding fuel sulphur content, shipping fuel is going to be a major cost for shipping lines. The low-sulphur fuel is difficult to get, as only a handful of refineries are in a position to supply it. That is going to drive up the cost of fuel substantially, which will have an effect on trade and the cost of moving goods.
More and more, you will see vessels moving towards being powered by LNG. That fuel is much cleaner and reduces the cost of transportation, which presents a potential benefit for T&T as far as clean bunkering is concerned.

The Trinidadian government has recently ratified the Paris Agreement. Will this impact companies at the Point Lisas Industrial Estate?
There are some studies and I think a focus group has been established to study possibilities. They are looking at trapping CO2 and possibly reinjecting it for EOR. I have not gotten any feedback or information with respect to expectations for emissions, whether it be regarding reusing CO2 or carbon trading.
The companies established here are mature with mature plants. Requiring those plants to conform to any changes in emission requirements may necessitate some substantial infrastructural changes. I am not sure what the plans are going to be going forward, but that is something that is going to be considered.
Every major tenant of ours is required to abide by certain environmental regulations, whether it be regarding water emissions, air emissions or even noise pollution. Even before the emissions rules of the EMA [Environmental Management Authority] came into effect, these companies had to be guided, under our lease terms, by the World Bank or equivalent standards.

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