The Natural Gas Industry in Trinidad and Tobago

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The natural gas industry in Trinidad and Tobago began with the discovery of gas on land at Mahaica in 1955 by Dominion Oil, however the first major natural gas discovery (One Trillion Cubic Feet (Tcf)) was off the East coast of Trinidad by Amoco in 1968 in the Teak offshore field. This was followed up in 1973 by a 2 Tcf find in the South East Galeota acreage.

There was however production and utilization of gas before this date. Although the dates referred to mark the first large finds of natural gas (i.e. > 0.5 tcf), prior to 1955, gas was utilized as fuel to power machines in the oilfields they were found associated with and was then known as casing head gas. During the 1930s three absorption and one adsorption plant for the recovery of gasoline from natural gas began operation in the country1. During this period as well (1933) the first small scale experimentation on natural gas for secondary oil recovery began, which blossomed into the first large scale gas injection program in the Forest Reserve field in 1945. But the general policy of the oil operators, then as it is now when an oil field is produced which has associated gas, was to minimize its production in order to maintain pressure levels in the reservoir to maximize primary recovery. There was also no use for the excess gas beyond what could used in the field itself for fuel and gas lift and in any case, the gas lift volumes were blown to the atmosphere (vented). By 1950, 40% of Trinidad and Tobago’s 32.3 bcf (88.5 MMscf/d) of natural gas produced in that year was wasted in this way, rising to 61 % of 97.7 bcf (267 MMscf/d) in 19602. In that year, the Petroleum Department had this to say about the sector: “The under utilization of our natural gas is a problem that has long plagued both the oil industry and the economy. In any associated gas economy such as ours, a market must exist for the gas or else it goes to waste. At present some 61% of produced gas is flared despite the existence of two large refineries a cement factory, power plant petrochemical plant all of which are gas consumers. The Petroleum Division has been actively concerned with

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Ministry of Energy Administration Reports: 1906 – 1995 www.energy.gov.tt Petroleum Department Annual Administrative Report for 1960

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this problem from a conservation viewpoint and several safeguards have been instituted by the Industry to avoid waste. In addition, many large scale injection projects are being studied and plans are now being drawn for the construction of a gas pipeline from Penal to Port of Spain. If these several projects come to fruition, it will not be long before full utilization of Trinidad annual gas production is assured”. As former Prime Minister, Patrick Manning, remarked to veteran energy journalist, David Renwick, “Unlike the evolutionary-type development of the crude oil and refining sub-sectors, a deliberate policy approach was adopted by the state for the development of the natural gas sub-sector.”3

1959 was a momentous year for the industry because the first manufacturing plant based on natural gas since the natural gasoline plants constructed in the 1930s (which utilized less than 1% of Trinidad’s total production through most of the 1950s) was commissioned. This was the Federation Chemicals Ammonia Plant (Fedchem) built, owned and operated by W R Grace, which by 1960 consumed 1.4% of Trinidad gas production. When by 1977, the Tringen Plant was added a stone’s throw away from the Fedchem site, the ownership pattern had changed compared to the inaugural Point Lisas facility. The Government owned 51% of the plant, owned the natural gas and the facilities transmitting it and had secured a more favourable natural gas price of $1.68 per thousand standard cubic feet (Mscf) compared to the 27cents per Mscf that was negotiated in 1959 between W R Grace and a transnational company with little involvement by the government.4 The Government’s approach was facilitated by the...
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