ENERGY AND ENERGY-RELATED INDUSTRIES

from Who's Who in Trinidad & Tobago Business 2022-23

by Prestige Business Publications Ltd.

AUTOMOTIVE AND AVIATION SERVICES

Exciting Times Ahead

By Kay Baldeosingh-Arjune

Photo: Platinum Sponsor CEOs participate in the CEO’s Panel on the Opening Day of the Trinidad and Tobago Energy Conference 2022 at Hyatt Regency. L-R: Darryl White, CEO, RBC Financial Caribbean Limited and Regional Vice President Corporate and Investment Banking RBC Royal Bank; Claire Fitzpatrick, President, bp Trinidad and Tobago; Dr. Thackwray Driver, President/CEO, the Energy Chamber of Trinidad and Tobago (Moderator); Mark Loquan, President, The National Gas Company of Trinidad and Tobago Limited; Bryan Ramsumair, Managing Director, DeNovo Energy. (Eugene Okpere, Senior Vice President and Country Chair, Shell Trinidad and Tobago participated in this session virtually). Photos courtesy: The Energy Chamber of Trinidad and Tobago.

It is an exciting, challenging and dynamic time for T&T’s energy sector as it looks forward to 2023 – with big plans to execute, critical policy decisions to make and implement, tremendous opportunities locally and regionally to pursue, and a skilful balancing act to choreograph between monetising T&T’s hydrocarbon resources and transitioning to a low carbon economy.

Energy Conference 2022

Speaking at the Trinidad and Tobago Energy Conference 2022, hosted by the Energy Chamber of Trinidad and Tobago, Prime Minister Keith Rowley noted that some people have interpreted T&T becoming a signatory to the 2015 Paris Agreement on Climate Change as a commitment to immediately eliminate all fossil fuels. Making the Government’s position crystal clear, he said: “We do not share this view. Energy security is a priority for Trinidad and Tobago. Accordingly, we have set in train steps to optimise the exploitation of our oil and gas resources while mitigating the emission of greenhouse gases and adopting low carbon solutions…To ensure a successful long-term energy transition, it is important to pursue policies that engender affordable and sustainable energy and serve as a foundation for operationalisation and prosperity.”

Prime Minister Rowley emphasised that world events have highlighted the reality that “fossil fuels will continue to play a major part in the energy supply chain, for still some considerable time, as the world innovates and transitions to low carbon energy sources” in a way that is both reliable and affordable. “Prudent climate change policies are required in order to avoid or mitigate inflation propelled by the greening effort,” he added.

In this regard, the Point Lisas Energy Association (PLEA) has formed a new green agenda subcommittee to lead and co-ordinate synergies in green agenda actions among member companies. Other private sector initiatives include a partnership between Kenesjay Green Ltd and Hydrogen de France to establish an industrial project to produce carbon-free hydrogen.

In addition, the investment group comprising Lightsource Renewable Global Development Ltd, Shell Trinidad and Tobago Ltd, and BP Alternative Energy Trinidad and Tobago Ltd are expected to finalise project agreements for a 112.22 MW Solar Project and begin construction by December 2022 with a planned completion within 12 months. The project will increase the country’s installed generating capacity from 2,093 megawatts to 2,205.2 megawatts.

Overview of recent E&P developments in T&T

The major finds announced in 2021 and the successful project milestones announced to date were welcome news for the country. Offshore, these include first gas from Shell’s Colibri project on 30 March 2022, estimated to provide nearly 174 million standard cubic feet per day (mmscf/d) or 30,000 barrels of oil equivalent per day (boepd) of near-term gas production; De Novo’s Zandolie development; EOG’s Osprey East Development and Osprey West Project; and the bpTT Cassia Compression Project.

Onshore, Touchstone has confirmed the commercial potential of its Royston 1 in its Ortoire Block and announced additional major finds within the Ortoire block with first gas expected in the second half of 2022.

Consequent on these developments, gas production is projected to increase to 3.28 tcf by 2024. Gas supply between 2024 and 2027 is still expected to be

Delegates at the Energy Chamber’s Trinidad and Tobago Energy Conference 2022

tight before improving in 2028 with the coming onstream of the Manatee and Calypso mega projects from Shell and bpTT respectively.

Despite the Covid-19 pandemic, bpTT’s Matapal project came in seven months earlier than planned, within budget, with first gas announced in September 2021. This project has been instrumental in reversing the trend of declining natural gas production. Initially, Matapal is expected to deliver 250-350 million standard cubic feet per day (mmscfd).

To meet projected demand for power generation, LNG and downstream production beyond 2024, the oil and gas majors operating in T&T have a number of projects now awaiting sanction. These include bpTT’s Ginger, Cypre and Coconut fields and extended field developments in its Mango, Savonette and Juniper fields. Additionally, bpTT is involved in a joint-venture with EOG in the Mento field in the Ska/Mento/Reggae (SMR) Block. EOG Resources has seven exploration projects that are currently unsanctioned, four of which are joint ventures with bpTT.

Of major significance for gas production from 2027 is the Calypso Deepwater Project by BHP/Woodside/bpTT, and the Manatee Field Development by Shell with Government and Shell agreeing to the terms and conditions of a Production Sharing Contract (PSC) in November 2021.

Projects with the potential to significantly improve oil production include new developments by Touchstone in its Ortoire Block; Heritage’s South West Soldado, Jubilee, Main and East Cruze fields; EOG in its SECC Block, and in a joint venture with Heritage in its Southern TNA Block; and projects proposed by Trinity and Perenco. Based on these new developments, oil production is projected to increase to 85,00 barrels per day by 2024 and to 104,000 barrels a day by 2026.

Government has mandated Heritage to identify more farmouts and workover opportunities and will be pursuing policies that require blockholders who are not working the acreage for which they have licences, to relinquish those blocks to allow companies who want to develop them to be able to do so.

Public sector initiatives

Key elements of the Government’s energy sector strategy going forward include increasing the target for renewables in power generation from 10% (target for 2021) to 30% of the country’s power generation capacity by 2030, transitioning to a hydrogen economy, electrification of the transportation system, and accelerating exploration and production activity in the hydrocarbon sector. There are several initiatives being implemented to achieve these goals.

Government has established a Carbon Capture, Utilisation and Storage Steering Committee to undertake the technical work required to reduce the country’s carbon dioxide emissions. It has also introduced an allowance in respect of the actual expenditure invested in Carbon Capture and Storage and Enhanced Oil Recovery, which took effect from January 1, 2022.

A feasibility study on the “Establishment of a Green Hydrogen Market in Trinidad and Tobago” begun in September 2021 is expected to be finalised in 2022 and to provide a road map for the decarbonisation of the energy-based industries in Trinidad and Tobago.

Government has also removed all customs duties, motor vehicle tax and value-added tax on the importation of battery-powered electric vehicles with an age limit of two years, as of January 2022 in pursuit of its objective to promote electric vehicles as the preferred mode of transportation. This is a key measure to achieve the country’s target of reducing greenhouse gas emissions from the public transportation sector by 30% by 31 December 2030.

Other important initiatives include:

- Series of bid rounds both offshore and onshore - Comprehensive review of T&T’s oil and gas taxation regime to ensure that the country remains an internationally competitive hydrocarbon province. - Mandate to Heritage to accelerate its programmes for lease operations, farmouts and joint ventures to avoid the stranding of potential hydrocarbon assets - Government-appointed team to negotiate with Atlantic LNG shareholders on the restructuring of the facility and the grant of a long-term liquefaction licence - Agreements signed by Government, relating to economic co-operation with regional neighbours for joint exploration of hydrocarbon resources in the shared maritime boundaries with Barbados,

Grenada, Guyana and Venezuela.

Recommendations from energy sector players on accelerating exploration and production

• Normal approval cycle needs to be shortened. Parallel processing could help everyone • Incentivise exploration companies to take the risk • Put data in public domain for purchase • Allow bids outside of bid round • Facilitate acreage infrastructure sharing either through industry initiative or Government so that marginal pool sizes can get molecules to market at a particular price • The Energy Chamber’s Six-Point

Plan (see details on its website https://energynow.tt/) includes recommendations to fast-track bid rounds and the approval processes, encourage innovative approaches to small field development, and divert gas from domestic electricity generation through energy efficiency and renewables. The plan notes that a one-year reduction in the time taken to first gas has been calculated to create

US$120 million in additional net present value for a typical Trinidad and Tobago medium-sized offshore gas field.

(Information for this article was sourced from presentations made at the Trinidad and Tobago Energy Conference 2022, hosted by the Energy Chamber of T&T in June 2022).

Dr. Haydn I. Furlonge

General Manager

PowerGen is driving opportunities to use waste heat and reduce carbon emissions

The Power Generation Company of Trinidad and Tobago Limited (PowerGen) is a reliable

and socially responsible long-term energy partner, committed to a greener, more sustainable T&T.

PowerGen is the largest and longest serving independent power producer in Trinidad and Tobago supplying about 825MW to the national grid, and has over 250 employees. It was formed when the Trinidad and Tobago Electricity Commission (T&TEC) divested its generation assets in 1994 with the T&TEC holding 51%, and MaruEnergy Caribbean LLC, a subsidiary of the Marubeni Corporation, with 39% interest, and National Enterprises Limited with 10% interest. In October 2021, Dr. Haydn I. Furlonge was appointed as General Manager of PowerGen in the midst of the COVID-19 pandemic and having to deal with health risk and supply chain challenges whilst delivering an essential service. Also at the forefront of his focus is guiding the Company’s energy transition to a lower-carbon future. Dr. Furlonge has

“PowerGen is driving opportunities to capture and use waste heat which can reduce carbon emissions and redirect natural gas to more profitable uses.”

broad international energy experience of over 22 years, building energy value chains in collaboration with a variety of multinational stakeholders. Dr. Furlonge’s priorities are maintaining PowerGen’s reliability and delivering clean and affordable power. “All of PowerGen’s electricity is produced from natural gas, so in a sense operations are already clean in that we are using the cleanest fossil fuel.” He considers waste heat as a valuable energy resource and notes that “at the moment, we are wasting waste heat”. PowerGen is therefore, behind the scene, driving opportunities to capture and use waste heat which can reduce carbon emissions and can redirect natural gas to more profitable uses. Dr. Furlonge notes that “the generation cost from renewable energy has also fallen significantly and we are working to diversify our energy mix.” At the same time, the country will continue to need base load power from gas and PowerGen is also keenly interested in developing newer more efficient gas-fired generators. One of PowerGen’s new Corporate Social Responsibility pillars focuses on “New Energy Leaders”. Dr. Furlonge explained, “the idea is to create future engineers, technicians and managers to serve the power sector.’’ PowerGen is keen to partner with all stakeholders - academia, business Chambers, professional Associations, Government and energy players, to help build a sustainable power sector for T&T.