Vernon Paltoo Trinidad Energy

Trinidad’s geographic location gives the country a strategic advantage in advancing as a regional logistics hub.

Vernon PALTOO President NATIONAL ENERGY

Strategic alliances

October 28, 2020

Vernon Paltoo, president of National Energy Corporation (National Energy), talks to The Energy Year about how the company works to encourage investment and foster a strong downstream sector. A wholly owned subsidiary of the National Gas Company of Trinidad and Tobago, National Energy is responsible for the marine logistics and port operations of Trinidad and Tobago’s industrial estates.

How would you define the notion of “conceptualisation, promotion, development and facilitation of new energy-based and downstream industries in Trinidad and Tobago”?
National Energy has pioneered key energy related developments in Trinidad and Tobago, and has been at the forefront of energy-based development for over 40 years. We are the first point of contact for investors wishing to add value to our existing suite of primary products, namely methanol and ammonia, or to introduce new downstream energy investment opportunities into Trinidad and Tobago, including renewable and sustainable energy projects.
We deliver value to potential investors by partnering with them to advance projects from conceptualisation to final investment decision (FID) to construction and start of production. We do this through a team of experts in the sector, together with strategic alliances and readily available infrastructure such as industrial estates and ports.
We facilitate investment by providing the requisite support and assistance in the management of the project development process. Specifically, we employ an effective project management methodology framework that involves a stage-gate process for advancing projects; present or assist potential investor in the presentation of projects for approvals to the relevant government ministries/committees; assist with country/location information/data to assist in making a final investment decision; provide guidance and assistance on the acquisition of regulatory approvals; introduce the project to relevant stakeholders, regulatory agencies and service providers; facilitate negotiations of key contracts; and identify and prepare site and other infrastructure requirements.

There has been a small but persistent chorus in the local press saying that industrial estates, especially Point Lisas, are no longer viable in today’s economic climate. What is your response to this?
The Point Lisas model of industrial development is recognised globally as a standard for developing gas-based economies and continues to be emulated by various countries internationally. However, with progress, there must be evolution, as changing market and economic conditions demand adjustments to approaches for industrial development.
For this, we are creating alignment of all stakeholders towards a holistic foreign direct investment (FDI) strategy exploring risk/innovation/sustainability, which maximises the benefits to be derived for the people of Trinidad and Tobago, while balancing a reasonable return on investment to the investor. In this regard, National Energy in January 2020 launched the ttEngage online electronic platform, which aims to provide a seamless experience to new investors in the downstream energy sector, through a co-ordinated and technology-driven investment facilitation and project development process.
It should also be noted that future industrial development will be heavily focused on a green economy and associated industries. As such, the model for industrial estates of the future will by necessity be different from those in existence today.

Trinidad and Tobago wants to have an inorganic chemistry industry. What steps are being taken to promote this concept to the wider world? What terms or conditions would National Energy be willing to offer or accept? How would you seek to assuage environmental concerns vis-à-vis this industry?
The promotion strategy has been a more targeted approach to specific players and industries. Also, there have been participants within this industry who have approached National to explore developing specific inorganic projects. Investors have indicated that factors such as competitive electricity prices, as well as Trinidad and Tobago’s strategic location between Latin America, North America, Europe and West Africa, continue to make us an attractive location. This is a key factor for this industry, since Trinidad and Tobago does not have substantial metal ore deposits, and having ready access to raw material sources from nearby territories would be integral to the project economics.
National Energy assesses and recommends projects for consideration based on broad categories, which include the viability of the project, the benefits and value to be derived to Trinidad and Tobago, as well as the project’s impact on the country’s resources.
Each specific project is evaluated on its own merit and preliminary impacts. However, for projects under active consideration, each developer/investor is required to apply for a Certificate of Environmental Clearance (CEC) from the Environmental Management Agency (EMA), which is the legal entity with responsibility for detailed assessment of environmental impacts of development projects.

Have you ever had any expressions of interest in an integrated melamine and downstream project?
In the past, there have been projects that were assessed and being developed in this area, but they did not advance to the FID stage.

 

Could Trinidad become a logistics hub for the region? What role would ports like Galeota play in that?
Yes, Trinidad’s geographic location gives the country a strategic advantage in advancing as a regional logistics hub. This role continues to evolve and is enhanced by the significant port and marine infrastructure that currently exists, coupled with an extensive operating history. The Port of Galeota is uniquely positioned to continue that legacy particularly as it relates to the expanding energy reserves in the Guyana/Suriname Basin and the growing need for port and marine services by E&P and logistics players.
The key points to note on Port of Galeota are that it is a strategically located trans-shipment hub with favourable proximity to the emerging South American markets; it has a large suite of services available including marine vessel services include tugs for berthing/un-berthing, warehousing, storage and fuel supply; and it is positioned for future development that include a deeper draught, increased number of berths and broader land-based services.

In your opinion, with a keen interest in ports such as Galeota, is the future of Trinidad and Tobago’s upstream sector offshore, or are there still opportunities onshore, as demonstrated by Touchstone’s recent successes?
Recent onshore discoveries suggest there is good potential for future development and contribution. These include Touchstone in Ortoire and Columbus Energy in Cedros. These discoveries are relatively small compared to the proven and possible offshore reserves though. Notwithstanding, the Port of Galeota will continue in its vital role to support all development and further enhance its offerings going forward.

What is your assessment of the viability of the renewables sector for smaller, local companies, considering barriers to entry, viability of bids and regulatory regimes allowing their participation?
At present, regulatory legislation is being actively developed to facilitate a smooth transition to renewables on a wider scale. This is evidenced by the recent award for a PV utility generation project to a conglomerate of participants. In addition, once distributive renewable energy generation becomes fully facilitated and supported, this will lead to increase the participation of smaller, local companies in the industry on a competitive basis.

Can the country meet its targets under the 2015 Paris Agreement?
Trinidad and Tobago continues to work aggressively to fulfil its targets under the 2015 Paris Accord, and the announcement of the PV utility generation project by the government will certainly ensure that this is advanced in a substantive manner.

What targets and aspirations do you have for the rest of 2020 and beyond for National Energy?
In the current operating scenario, National Energy is focused on several specific areas including: renewable energy and energy efficiency, as well as emerging energy solutions (assessing and developing the adoption of lower carbon technologies such as advancing a hydrogen economy); continued development of the natural gas industry in the areas of transportation (alternative fuels); and chemicals/commodities geared towards a green economy and which require low natural gas volumes.
My aspiration for National Energy is, just as the company was the first to pioneer development in the petrochemical sector in Trinidad and Tobago, that we assiduously advance the transition towards a sustainable, efficient and green energy sector with a local and regional presence.
Even as challenges remain in a world of rapid changes (low oil prices, Covid-19, depressed commodity prices), National Energy remains confident that it will continue to succeed and ensure viable operations. Besides having a team that is committed to working together, we are also building on our strengths of a strong asset base, easy investment facilitation and valued experience in marine operations, together with the provision of energy infrastructure.
For the rest of 2020 and building on our 5-year Strategic Plan, National Energy will continue to advance regional growth through its first regional office in Guyana (a central hub for the NGC Group); accelerate the development of a green economy (emerging energy solutions, renewable energy and energy efficiency, equity participation in RE projects for the NGC Group); attract and facilitate investment towards a contribution to GDP of 1-2%; leverage on the recently launched ttEngage platform for attracting investors; expand alternative fuel markets within the region; invest in infrastructure development to facilitate growing demand; diversify market risks by expanding/investing into other jurisdictions and emerging markets; and strengthen internal operations for continued oversight, efficiency and commercialisation of ports, marine transport and estates.
The main thrust for the long term will be to enhance the company’s financial position, while still maintaining a strong thrust towards national and regional development through our people.

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