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Gas exporting countries seek Japan’s interest
With Japan’s nuclear plants shutting down, there’s been speculation that that country’s demand for an alternative fuel could send natural gas prices up. Moreso, local energy analysts have questioned whether T&T will be able to step in to fill the void. Energy Minister Carolyn Seepersad-Bachan said the Gas Exporting Countries Forum (GECF), for which T&T holds the alternate presidency, is assessing the devastation in Japan and how that country’s needs for natural gas as an alternative for nuclear power generation will change.
“I am confident as well that the GECF is resolute in ensuring that the people of Japan are protected from any attempt to push prices out of control,” Seepersad-Bachan told the Business Guardian. She observed that member countries are considering an extraordinary general ministerial meeting or a meeting of the executive to discuss and consider ways of providing assistance to Japan. The Energy Minister was cautious that T&T’s response to Japan’s disaster was not an opportunistic one. “Really, the time comes when we must balance our own economic survival with the need to act in a humanitarian manner when our trading partners are so badly affected by a natural disaster,” she replied.
She pointed out that a few weeks ago the issue of T&T’s existing LNG contracts was raised and she sought to re-open those contracts to see how T&T could maximise its take from LNG exports. “But let me say explicitly that this approach would be based on negotiations with our LNG partners with the mission of delivering more value for natural gas to the people of our country. That said, our LNG contracts are focused on the North American market.
“From those markets, when shipments are re-routed to other markets, the destination of our LNG has no economic or financial impact on our revenues so Japan’s LNG supply would really be impacted on a larger scale through other gas producing nations, and of course by virtue of the fact that the GECF represents all major gas producing nations around the world.” Given the political instability in the Middle East, in particular Libya, energy prices have trended upward.
Is T&T benefitting?
“In a dollars and sense context, yes our revenues will increase. Any spike or sustained increase in oil prices will impact positively on our revenues as an oil producing country. But we must take this in the context of our current level of oil production.” Seepersad-Bachan said from mid-January and into February 2011, oil production stands at over 103,000 barrels of oil a day.
She observed that toward the end of last year, oil production fell which was directly related to the BHP Billiton’s planned shutdown to facilitate the installation of gas platform in the Angostura field. “This shutdown was planned as far back as 2008 and when a planned shutdown is in an advanced stage, it means that contracts for capital intensive services would already have been made involving millions of dollars as well as contracting pipe laying vessels.
Requesting that BHP defer this planned shutdown would have meant that the Government would take up the penalties for the cancellation. We could not do that. It is instructive to note that at the time of BHP’s planned shutdown, oil prices were not as high as they are now.”
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