Atlantic LNG’s restructuring can drive investment decisions for big step changes.


NGC targets a world-class hydrogen economy in Trinidad

February 8, 2023

Mark Loquan, president of The National Gas Company of Trinidad and Tobago Limited (NGC), talks to The Energy Year about challenges in raising Trinidad’s natural gas production, plans to establish a world-class hydrogen economy and steps NGC is taking to decrease methane emissions. State-owned NGC aggregates and distributes the country’s gas resources.

This interview is featured in The Energy Year Trinidad & Tobago 2023

Trinidad and Tobago’s gas production target for 2024 is 90.6 bcm (3.2 tcf). Do you see any challenges along the path to achieving that?
Yes, one challenge is that the reservoirs are depleting, and the industry is trying to use what we have more efficiently until more projects get sanctioned and come on line – especially bigger projects like the Manatee field, which should be active by 2027. Between now and that time, there are more recent projects that have been announced, such as Coho, which is now coming on line, and we expect to see Cascadura in Q1 2023. Even with all the projects happening now, we don’t have the luxury of time for delays.
Another challenge comes from the inefficient use of gas in the power sector, not only by T&TEC but by Independent Power Producers (IPPs) as well. This gas is subsidised. Therefore, NGC is trying to focus on the power issue.
At this point in time, petrochemical prices are high but we are not fully benefiting from this opportunity as we are using gas for power. What would help to ease that demand from the power sector would be renewables projects such as Shell and BP’s solar development Project Lara, as well as a reduction in domestic demand and usage. There are some challenges, but there are also opportunities.

How important is the population’s awareness of energy-related matters and what steps are being taken to improve it?
Firstly, we’ve introduced mobile apps such as EnergySmarTT, which shows people how much money they can save by converting to more energy-efficient devices. Secondly, we have been part of a Cabinet-appointed team looking at energy efficiency. The core work of that team was to get into the legislative frameworks, create standards for appliances and promote public education.
NGC is also partnering to deliver a weekly programme called New Energy Conversations on a local television station, to raise awareness among the general population around energy issues. We need to make sure that everyone is aligned.
To support research into clean energy in the Caribbean, NGC built a website called CariGreen where you can find all the renewables projects listed in one place. You can click on a project and find all the information about it, including how much power it generates, who manages the project and who funded it.

What impact could the Russia-Ukraine crisis and consequent higher global oil and gas prices have on the Trinidadian market?
It is expected that the war will change the fundamental way energy security is looked at in Europe. The challenge in this is that we still face problems with how much we can produce and high usage. The best move we can make right now is to focus on short-term projects such as the Cassia-C compression project and the Cascadura field.
The restructuring of Atlantic LNG is fundamental. It is being done to simplify the commercial arrangements with Atlantic trains 1, 2, 3 and 4 in order to make them a seamless box of agreements without the complication of different train ownerships and commercial arrangements. This ongoing process involves all the shareholders in Atlantic LNG, including NGC and the government.
There’s a connection between Shell preparing to sanction and work on the Manatee field and Atlantic’s restructuring because it dictates the terms upon which companies like Shell will make such long-term investments. The restructuring can drive investment decisions for these big step changes.
These changes may not take advantage of the current market prices but they are going to make sure we stay reliable, use less energy and get the projects that have been sanctioned going as soon as possible.

How confident are you about leading Trinidad and Tobago to establish a world-class hydrogen economy?
We are still using natural gas to produce the hydrogen needed for ammonia and methanol production. This is called grey hydrogen, and we have a cluster of plants here that produce hydrogen in this way.
Europe is trying to accelerate the energy transition while still reducing dependency on Russia. They’ve looked at carbon border adjustment mechanisms, which essentially tax the carbon footprint for steel, fertilisers and other such products going into Europe.
This impacts our market here, as T&T petrochemical plants will now face these kinds of additional taxes. Such factors drive the conversations and action to bring our carbon footprint down. There are changes happening in Point Lisas where we are looking at the possibility of creating a hydrogen economy for the future.
Projects like NewGen’s are essentially one option that NGC is looking at, where the waste heat from PowerGen will be used to generate steam that will drive turbines to generate electricity. That electricity will electrolyse water into hydrogen and oxygen, and the hydrogen can be used as feedstock in the ammonia plants.
It wouldn’t change the carbon content of that space, but it would eliminate the demand for additional volumes of natural gas in order to produce hydrogen from that plant.
Through National Energy, we are doing studies with KBR to see how best we can take our natural resources, such as solar and wind energy, and convert them into energy we can use. The answers lean to more offshore wind because land space is limited. The goal is to build the hydrogen sector now, while we study how to use wind resources to generate electricity for fully green hydrogen production in the future.


What challenges are there in transporting hydrogen?
Hydrogen is a lot more difficult to transport from one side of the world to another because, among other factors, it takes more compression. Essentially, ammonia is a very attractive option for transporting hydrogen because you can break it down to produce hydrogen. And if the ammonia is made using wind or other renewable sources, it becomes a greener product.

How do the most recent investments in methanol trading benefit the NGC portfolio?
In addition to LNG and oil, we’ve started trading methanol to expand our portfolio, and one of the plants in our chain is CGCL [Caribbean Gas Chemical Limited], in which we have a 20% stake. Regarding the energy transition benefits, we are very conscious that methanol even has the potential to be used as a fuel in the same kind of ships that would be transporting it.
They are hybrid vessels with dual engines, so you can use your traditional hydrocarbons, but they are modified to run on methanol as well. This will help to reduce carbon emissions. One of the arrangements that we are looking at is lifting of methanol cargoes from Methanol Holdings Trinidad. They have invested a lot into their shipping fleet, part of which is using greener fuels to meet the shipping requirements for the clean energy transition.
We have also finished all the negotiations and signed an agreement to be an offtaker of blue hydrogen from a company in Louisiana.

How central is the role of natural gas in the energy transition?
We have to carefully manage how we move from point A to point B because it’s not possible to simply stop using fossil fuels and start using only renewables.
So, what we see now is the EU’s recently passed Taxonomy Regulation starting to include natural gas. It was originally not on the list, as part of the aggressive move away from fossil fuels. But it is now part of the investment portfolio for Europe, as countries are realising that it is not practical to immediately eliminate fossil fuels. The positive thing is that even though gas is a fossil fuel, it’s much cleaner than coal and oil, and it does help us to transition to the stage where we can use renewable sources entirely. The transition will realistically take years, perhaps decades.

Have decarbonisation efforts in the local transport sector yielded results?
The world is moving toward electric vehicles [EVs], but even as they become more available, they remain expensive. Therefore, a transition period will be necessary, and CNG conversions can help. Trinidad and Tobago has pledged to reduce our overall emissions by 103 million tonnes by the year 2030 – with 72 million tonnes to be cut from industry, 28 million from power generation and 2.6 million from the transportation sector. Of that 2.6 million, 1.7 million tonnes are to be reduced from public transportation sources.
We’ve already saved about 55,000 tonnes of CO2 with CNG – 77% from public transportation. By 2030, we’re estimating we will reach 75,000 tonnes saved, but the goal is to reach 2.6 million tonnes. We’re not going to achieve all of it using CNG; EVs can contribute. I think there’s still a lot of potential for increased demand for CNG conversion, given that diesel and gasoline prices and the cost of living in general are going up.
So as far as the mandate to decarbonise is concerned, yes, we are moving forward. But as far as potential is concerned, only a tiny fraction has been achieved.

What steps is NGC taking to address the issue of methane emissions?
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 it and then putting it back into a system. 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 have to report our measurements of methane. NGC’s membership means all our operating partners also have to 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.

What would be your final message to international investors looking at the Trinidadian energy industry?
Trinidad and Tobago is fortunate to have many world-class players such as BP, Shell and Nutrien – some of the biggest players in the world – operating locally. Therefore, we have the combined technical capabilities of local and international experts resident in our country.
Despite the uncertainty that may come with geopolitics, the certainty that we have here is that we already have the plants and infrastructure, world-class players and years of R&D. All the players in the energy space are talking about the transition. BP and Shell are already investing in it here.
This means we have to enter into conversations about collaboration that go beyond the traditional conversations. It means evolving our approach in energy education and related fields, and being willing to do what is necessary to support the transition.

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