History

Taking a Look at NGC’s Development Through the Years.

Introduction

The story of The National Gas Company of Trinidad and Tobago Limited (NGC) is a story of unparalleled state-led involvement in natural gas development.  Prior to NGC’s formation in August 1975, in hindsight, it was never a question of ‘if’ a gas company would be formed, but rather ‘when’ a local gas entity would be created, and how it would develop and grow the industry for the benefit of all the citizens of Trinidad and Tobago.

You see natural gas utilization was not a new phenomenon in Trinidad.  For the first half of the 1900s although the natural gas resource remained largely underdeveloped it was a part of the country’s energy landscape; often considered a by-product or ‘nuisance child’ in oil exploitation activities, it was nevertheless available and used for gas lift operations in the country’s oil refineries and in the small communities adjoining the oil fields.

However in the period following World War II the drive to promote electricity sales as a means of stimulating industrialsation led to natural gas being made available as a low cost fuel for T&TEC.  In 1953 for instance T&TEC had introduced natural gas as a fuel for its steam generators at its Penal Power Station, located in south Trinidad, thus giving natural gas its first taste of commercialization in the country.   By the end of the 1950s, natural gas was being used in the manufacture of cement and ammonia.

Therefore by the 1960s and early 1970s Trinidad had an embryonic natural gas pipeline network centered at the Penal area.  However the depletion of gas reservoirs in that area and the discovery of a significant gas province of great potential off the East Coast in 1969 provided the government with an alternative resource to crude oil and with ‘oil money’ at its disposal the means of diversifying the country’s petroleum portfolio for economic development.

Dr. Eric E. Williams, Trinidad and Tobago’s first Prime Minister, summed up the situation very eloquently when he said in his 1970 Budget Speech ”the decade of the 1970s begins most propitiously with the prospects of a high level of offshore production of natural gas and low Sulphur crude oil production.  There are few developing countries in the world, which begin the decade with such assets.  It is for us to utilize these assets for the national benefit, so that by the end of the decade we can look back upon an era of unprecedented economic and social development”.

His government in the proceeding period formulated a new industrialsation policy, the goal of which was to create industrial projects based on the country’s hydrocarbon resources, particularly natural gas, whose untapped potential was encouraging.

The government therefore sought to encourage further exploration of the resource as well as to expand its utilization.  This it did by funding the creation of a natural gas industry received from the ‘oil boom’ surpluses of the 1973-1975 period, which provided the revenues to develop a modern gas-based industrial estate and port at Point Lisas in central Trinidad.

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Public Consultation

In January 1975, the Government had convened an historic public consultation, which provided a definition of natural gas utilisation, which up to today continues to guide the development and direction of the natural gas industry.

This public consultation was attended by:

  • Senior Representatives of various ministries
  • The local and international petroleum and financial community
  • The labour movement and University of the West Indies

The conference document “The Best Use of Our Petroleum Resources”, formed the basis for policy initiatives with eight projects being identified for further study by the Task Force:

  • Rapid expansion of the power system
  • Upgrade of petroleum refining
  • Establishment of an aluminium smelter
  • Establishment of an iron and steel complex
  • Expansion of ammonia and urea production
  • Establishment of a methanol plant
  • Upgrade and expansion of cement production
  • LNG for export

Five of the above-listed projects survived – electricity expansion, production of DRI, expansion of ammonia and urea, methanol and cement – one other, related to the issue of conservation, was added – the Flare Gas Conservation Project, which went into the development stage.

Government Task Force

There were some issues, which needed clarification, including natural gas pricing and taxes, priorities for the utilization of natural gas, conservation and infrastructure development.

The decision to prioritize gas utilization led to the establishment of a Government-led Task Force made up of senior professionals, academics and technocrats that was mandated to undertake profile studies as required and to evaluate investment proposals from mainly foreign companies that were desirous of participating in the development of gas-based industries.

Priorities for gas were identified as:

  • Enhanced oil recovery projects
  • Clean source of fuel for electricity generation, small consumers, large scale processing – petroleum refining and petrochemicals, large scale energy intensive industries – cement, steel and aluminium
  • Chemical feedstock for ammonia and derivatives, methanol and derivatives and DRI
  • Feedstock for energy export – LNG, fuel grade methanol and synthetic gasolines