Trinidad’s The NGC Group pursues strategic growth

Trinidad and Tobago

Dr. Joseph Ishmael Khan, chairman of The NGC Group of Companies, talks to The Energy Year about the strategy behind The NGC Group’s recent agreements and acquisitions and its plans for decarbonisation. State-owned NGC aggregates and distributes the country’s natural gas resources.

What were some of The NGC Group’s most significant partnerships and achievements of the past two years?
The growth that occurred in The NGC Group is based on the collective efforts of NGC and its subsidiaries, and our commitment to enhancing value creation, as well as the advancement of our Green Agenda. We have also been focusing on leveraging our people as we see people as key drivers of value creation.
We have formed key partnerships along the gas value chain and focused on international arrangements. For example, we took a very strategic and intentional core approach with Phoenix Park Gas Processors [PPGPL], to acquire one natural gas liquids (NGLs) terminal in Hull, Texas, and then another in Minnesota.
Significant gas contracts with upstream and downstream players have been signed and will ensure sustainability in the petrochemicals sector. In 2021, commodity prices were high. Prices for ammonia, methanol, LNG and NGLs increased by 190%, 92%, 911% and 112% respectively when compared to 2020 commodity prices. It is also worth noting that we signed a contract with IGP Methanol to move methanol cargo from the US Gulf Coast [with NGC purchasing and trading the commodity].
In other areas, we increased our equity in Block 3 to 31.54%. We signed a Heads of Agreement for the restructuring of Atlantic LNG, along with bpTT, Shell and the government of Trinidad and Tobago. We have also advanced the BP-Shell utility-scale solar development Project Lara. National Energy is facilitating the development of the Brechin Castle Solar Farm – one of two solar farms under Project Lara. Project Lara will have an output power capacity of approximately 112 MW and is being developed by a consortium of Lightsource bp, bpTT and Shell.
In Ghana, NGC executed the design, procurement, construction and installation of a pressure regulator package. It was a significant step for NGC’s project engineering to do project management work at the international level.

What is the strategy behind the acquisition of the NGL terminals in Houston and Minnesota?
By establishing ourselves in Houston, and being able to trade NGLs, we will be able to access the US and Mexico markets, thereby diversifying our income stream. This also makes PPGPL the first of The NGC Group, to establish itself in the USA. The terminal in Minnesota will allow us to access the Canadian market.
This decision was taken to build on our value chain. We realise that we cannot only look at value creation through a confined approach. After looking at the state of the economy of Trinidad and Tobago, and its gas supply, we simply decided to be more innovative and strategic.

What key factor would you say has contributed to the Group’s significant increase in profitability in 2022?
Though the significant increase in global commodity prices has contributed to our revenue, our financial success was largely a result of key decisions to expand as part of an ongoing strategy.
Our leadership and strategic plan to 2025, has contributed greatly to our success in recent years. The NGC Group is continuously working with the upstream companies to secure a natural gas supply and we signed a milestone gas supply contract with bpTT with whom we secured a domestic gas supply for the coming years. In the downstream sector, we have strengthened our energy marketing and trading portfolio by signing an agreement with Proman to lift methanol cargoes from Methanol Holdings (Trinidad) Limited’s Point Lisas facility.

What significant agreements has The NGC Group made to support national decarbonisation efforts?
Supporting our Green Agenda, we signed an MoU to do collaborative work with NewGen to create a sustainable hydrogen economy involving green hydrogen. Another milestone is the MoU signed with Trinidad and Tobago Solid Waste Management Company, to look at the potential for commercialising methane gas produced in the landfills.
We also undertook collaborative research with The University of the West Indies (The UWI) looking at carbon sequestration in relation to the quantification of the amount of carbon stored in the roots of trees.

How is The NGC Group navigating the dichotomy between economically benefitting from fossil fuels and reducing emissions as part of the global energy transition?
As the world navigates the green energy transition, natural gas will be around for some time. It is seen as the cleanest fossil fuel, so some of the major international players have an outlook for natural gas being an integral part of the energy mix to 2050.
There will be a demand for natural gas in the long term and revenue derived from it can be used to fund the transition in the medium and long term. NGC’s strategy incorporates expanding Trinidad and Tobago’s natural gas value chain to Point Lisas and looking at how we can optimally utilise each molecule.
While we expand into renewable power generation sources such as solar and wind, we are also focusing on developing a green hydrogen economy for Trinidad and Tobago. We have done this by launching a roadmap to a green hydrogen economy through National Energy and Inter-American Development Bank. The NGC Group plans to play an integral role in the nation’s transition to green energy.
We are paying close attention to methane emissions by tracking and monitoring them via satellite technologies. NGC is the first Trinidadian company to report to the EITI framework and has achieved a score of 89/100 – the highest in Latin America and the Caribbean for methane monitoring.
Carbon sequestration will also play a significant role in our sustainability strategy; a total of 7,488 tonnes was sequestered in 2021. The UWI is now engaged in providing research to ascertain the ability for the root systems of replanted forests to absorb the sequestered carbon dioxide.

What is the importance of regional collaboration in the green energy transition?
It is important to note that when we discuss the regional energy landscape, it does not equip a single country to meet energy security requirements for the region. It will require an effort from all, which is why we have a CARICOM branch, CCREEE: the Caribbean Centre for Renewable Energy and Energy Efficiency, with which we now have a partnership. They have a very important role in the region for the promotion and design of renewables projects, the energy efficiency of buildings and so on.

How do you view the country’s role in energy security in the Caribbean?
Trinidad and Tobago is set to continue playing a key role in providing a reliable LNG supply to global markets through Atlantic LNG. The former has already delivered 51 cargoes, with 41% shipped to Europe despite the shortfall in gas supply.
The current negotiations between NGC, the Atlantic shareholders (Shell and bpTT) and the government, will aim to secure an ownership structure that is more simplified. Such an arrangement can increase the potential to receive additional revenues from LNG exports, and the new agreements allow Trinidad and Tobago to market its own LNG globally.
As for upstream gas developments, Shell’s Manatee project, which holds approximately 2.7 tcf [76.5 bcm] of gas reserves, along with smaller-scale production projects, is an important development. Additionally, there is a two-year licence granted by the US Treasury Department to develop the Dragon field, which is in Venezuelan territory. These projects will play a significant role in solidifying Caribbean energy security.

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