Trinidad& Tobagos’ natural gas bonanza is over and there are now key decisions that must be made with a sense of urgency, bpTT chairman Robert Riley told energy industry stakeholders earlier this week.

He said opportunities in the past for making easy money from natural gas were gone and ‘we can no longer depend on the early advantages we had as first mover into the United States LNG market, as we are now facing serious challenges’.

Riley said the country made plans beyond what the hydrocarbon industry could sustain and there was the need to make a new oil or gas find in short time.

Riley was addressing members of the American Chamber of Commerce on ‘The Future of the Gas Business in Trinidad, Time to Rethink’.

Riley said the situation was critical and called for frank and open debate about the future.

He said: ‘In the new global environment, Trinidad must adjust to a world market that is characterised by low natural gas prices, a competitive global LNG market that is becoming more integrated and where the system on the long term contract pricing will continue to erode.’

Riley suggested that key players in the industry ‘become more efficient producers, and adapt to the environment if we are to derive the maximum revenue from gas’.

He said: ‘What we have to do is to focus on efficiency and revenue as opposed to growing volumes.’

The local sector now produces four billion cubic feet a day of gas, with approximately 60 per cent being exported as liquified natural gas (LNG), 27 per cent used in the petrochemical sector, and seven per cent in power generation, he said.

Riley said: ‘Although there is an increase in gas production, much of this LNG is coming into the market at a lower cost from associated gas, a by-product of primarily rich oil reservoirs.’

Riley recalled a recent announcement from the Ministry of Energy stating that ‘there is enough gas resources to meet the strategic projects that government is committed to 2028’.

He said: ‘The ministry’s estimate of proved gas reserves stands at 15.37 trillion cubic feet, while probable gas reserves are at 8.45 trillion cubic feet, and possible gas reserves at 6.39 trillion cubic feet.’

He said in this context, ‘Trinidad and Tobago has already gone ahead of plans and expenditure patterns beyond what the gas industry and hydrocarbon industry can enable the country to sustain’.

The energy sector accounts for 45 per cent of Gross Domestic Product, 80 per cent of exports and 58 per cent of government revenue.

He said in such a situation: ‘Our future cannot depend on existing reserves base and we clearly need a new gas or oil province within a critical time frame.’

Riley predicted that ‘over the next ten years we will have the challenge of steep declines in existing producing reservoirs and that it would take US$500 to $600 million in annual capital investment to sustain our current production capacity’.