Investment in GTL plant:USD 450 million
Length of GTL plant construction phase:18-24 months
Economic life of project:25 years
New investment expected to be generated through GTL plant:About USD 120 million
GTL potentialMay 13, 2016
TOGY talks to Ainsley Gill, CEO and director of NiQuan Energy Trinidad, about the company's plant in Trinidad and Tobago and future gas-to-liquids (GTL) opportunities. NiQuan Energy Trinidad is a subsidiary of US company NiQuan Energy. NiQuan Energy Trinidad was established in 2012 to acquire the World GTL charged assets in receivership.
Could you give us an update on NiQuan Energy’s GTL plant project?
We have concluded all of our negotiations with the receiver. NiQuan was not interested in a scrap deal and we are working with both NGC [National Gas Company] and Petrotrin to create a living, vibrant, business that creates enterprise value.
Could you tell us more about the bidding process?
The bidding process was a transparent process agreed between the receiver and the bidding parties beforehand. Throughout the process, NiQuan’s focus was on how to create a business and deliver on the value of the original project. Trinidad and Tobago put hundreds of millions of dollars into that project and the real prize lies in gas revenues, tax revenues, jobs, investment and the environmental benefits of GTL products.
Everyone else wanted to scrap the plant and leave all that value on the table. NiQuan said, “No, there’s a better way if we complete the plant and build a business.” We showed everyone how we would deliver on that vision and that’s why NiQuan won the bid.
What are the benefits of your project?
The project is a win-win for everyone involved. NiQuan is able to offer investors an attractive return on investment. Trinidad and Tobago will get a return on its original investment in terms of revenue from gas sales, taxes and other fees, and the country will benefit from the creation of skilled jobs and the access to cleaner energy products.
In specific terms, the benefits will include a return to Trinidad and Tobago on its USD 450-million investment without any further cash investment by the government; revenues to NGC for natural gas purchases for the plant over the economic life of the project, [which is 25 years]; remittances, tax and other statutory dues over the economic life of the project; about TTD 800 million [USD 120 million] of new inward investment into Trinidad and Tobago; about 700 jobs created during the [18 to 24-month] construction phase; and about 65 skilled permanent jobs, plus about 10 supply chain jobs for every permanent onsite job. In addition, Petrotrin, as the offtaker, will benefit from a high-quality premium blendstock, increasing the value of its product slate.
Trinidad and Tobago will be one of only a handful of gas-producing countries in the world with an advanced and commercial-scale GTL production facility that allows gas owners to diversify their target markets and produce high-quality fuels directly for the lucrative transport fuels market. No other gas product has the range, flexibility or value of GTL’s product slate.
What are the key challenges in promoting the benefits of your project?
The main challenge was gas availability and the commercial capability to commercialise GTL at a relatively small scale. Small GTL has always been the biggest challenge in the GTL sector because you’re working with small margins. Many organisations have tried to make it work, but NiQuan Energy is the company building the world’s first small-scale commercial plant.
We also have a major education challenge. GTL products deliver higher performance with lower emissions and GTL fuel is essentially zero-sulphur. The challenge is to educate regulators about what our products can deliver in terms of environmental benefits and improved air quality, while at the same time, making consumers aware of the performance benefits. The energy space rarely produces a win-win [situation] for both the environment and the consumer, but GTL is one of those rare examples and we need to tell people about it.
Can the issue of a lack of financing in the country be mitigated?
The unfortunate reality is that Trinidad as a financing market has not participated in the front end of energy projects. It participated in operational capital, but not from the risk point of view.
My assessment is that it doesn’t have the adequate resources to assess and accept that risk, and that is a challenge.
How do you view the optimisation of efficiency and asset integrity?
There are great asset integrity companies here that can maintain service, do the pipes and everything to maintain the assets. At NiQuan, we look at this plant as a small one for us. It is the first [small-scale] GTL company to be fully commercial. There is no other small-scale, commercial [GTL] company.
Success builds success, and believing builds believing. We can certainly see ourselves building on success and establishing a second plant here in Trinidad.
We are going to turn this into a major business here. We are the key to diversification. Trinidad and Tobago has very linear markets: methanol, ammonia, LNG – the traditional sectors. GTL is going to be vertical. It’s innovation. We will develop a horizontal market for it, but this is absolutely diversification in the energy market.
We are making transport fuel, and the beauty of this fuel is that we don’t need to build additional infrastructure for the customer to use it. The infrastructure exists globally. That is a huge advantage.