Ten years left of LNG in T&T

BY RENUKA SINGH

Friday, July 16, 2010

TRINIDAD and Tobago's natural gas reserves have fallen again.

The country now has ten years of natural gas left in its proven reserves.

The results were released on Wednesday by Ryder Scott Company, based in Houston, Texas, USA, which has done four previous oil and gas audits of the country's reserves.

Natural gas is the country's largest revenue earner.

Company representative Larry McHalffney admitted the declining reserve figures painted a "bleak picture" of the country's oil and gas future, but he said, "What appears to be is not always the case."

In presenting the audit findings at the Hyatt Regency Trinidad hotel in Port of Spain, McHalffney said despite the steady decline in the proven gas reserve figures over the past nine years, the country maintained a "steady, stable reserve base".

Since 2000, proven natural gas reserves have declined from 19.7 billion cubic feet (bcf) to 15.4 bcf in 2008, Ryder Scott data showed.

Data for 2009 released on Wednesday showed reserves had declined even more, down to 14.4 bcf.

Probable reserves stood at 7.8 bcf and possible were 5.9 bcf of gas.

It comes at a time when gas production levels in the country have dropped because of fewer exploration and production investments by energy firms.

The last time Ryder Scott presented the audit, there were 12 years of natural gas reserves.

Energy Minister Carolyn Seepersad-Bachan said to satisfy the natural gas demand, Trinidad and Tobago had been tapping the reserves at a rate of 1.4 trillion cubic feet yearly.

Natural gas prices have lingered at around US$4 per mmbtu for months.

Now, what needs to happen is a "significant" investment in exploration for natural gas.

"Our goal is 100 per cent replacement of annual gas production," she said, but to achieve this, the Government would encourage the necessary exploration, appraisal and development drilling in order to move resources into the reserve categories.

'There must be significant and sustained exploration to activity to maintain the reserve base,' she said.

The stable reserve base, as outlined by the Ryder Scott audit, proved the country was on the right track, she said.

"This demonstrates that although our extraction rate has increased, we have been able to transfer exploration resources to the reserves category," she said.

Seepersad-Bachan said to help bolster the declining figures in all three categories, the Government has opened the competitive bid round for both the shallow and deep-water exploration.

She said the bidding process started in April, ends in August and has already attracted bids from at least eight companies.

"Our expectation is that these bids would lead to product-sharing contracts," she said.

She said the decision-making process would be faster this time and expected to award contracts by December.

Though Seepersad-Bachan did not say if she was worried by the ten-year gas projection, she said she "did not want to delay the bid rounds for deep-water exploration".

She said recently completed study of the deep-water areas revealed reservoirs that "contain significant quantities of oil and gas" and added those areas have already been earmarked for bids.

The projection would be a worrisome development for regional partners Jamaica, which is looking towards locking in long-term supply of liquefied natural gas (LNG).

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Ten years left of LNG in T&T