VZCZCXRO5974
RR RUEHDE RUEHGR
DE RUEHSP #1203/01 3531929
ZNR UUUUU ZZH
R 191929Z DEC 07
FM AMEMBASSY PORT OF SPAIN
TO RUEHC/SECSTATE WASHDC 8877
INFO RUEHHH/OPEC COLLECTIVE
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUCNCOM/EC CARICOM COLLECTIVE
RUEHSG/AMEMBASSY SANTIAGO 0059
RUEHBU/AMEMBASSY BUENOS AIRES 0034
RUEHKM/AMEMBASSY KAMPALA 0001

UNCLAS SECTION 01 OF 02 PORT OF SPAIN 001203 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENGR EPET EIND TD
SUBJECT: TRINIDAD GASBAG - ENERGY SECTOR NEWS (#3-07) 
 
In this edition, we report on developments in the Trinidad & Tobago 
(T&T) energy sector during the third quarter of CY-2007: 
 
¶1. bpTT, Energy Minister comment on Gazprom rumor 
¶2. Gas audit: proven reserves down to 12 years 
¶3. T&T Energy Conference charts policy directions 
¶4. Chile joins the LNG queue 
¶5. Uganda seeks T&T help to manage oil/gas reserves 
¶6. Experimental methanol power plant commissioned 
¶7. BG explores for gas on land 
 
--------------------------------------------- ----- 
¶1.  bpTT, Energy Minister comment on Gazprom rumor 
--------------------------------------------- ----- 
 
Responding to international press reports that British Petroluem is 
offering a stake in T&T's Atlantic LNG to Russia's Gazprom, local 
subsidiary bpTT described the reports as "pure speculation" and 
declined to comment.  Then-Energy Minister Lenny Saith subsequently 
stated that any such deal would be subject to GOTT approval.  bpTT 
produces roughly half of T&T's natural gas and owns between 34% and 
42.5% of each of the four LNG trains comprising Atlantic LNG's 
operations, which collectively supply two thirds of US LNG imports. 
The other shareholders in ALNG are British Gas, Repsol (Spain) Suez 
LNG (France), and T&T's National Gas Corpoation (NGC). 
 
--------------------------------------------- -- 
¶2.  Gas audit: proven reserves down o 12 years 
--------------------------------------------- 
 
According to the Ryder Scott audit ofT&T's natural gas reserves at 
end-2006, T&T's prven reserves of LNG have declined by 11 per cent 
ince end-2004, with a reserves/roduction ratio of approximately 12 
years based on current production of 3.8 billion cubic feet (bcf) 
per day.  Responding to the announcement of the audit results, Prime 
Minister Manning asserted that future exploration, including eleven 
wells currently on the drawing board, will result in the proving up 
of reserves currently classified as "probable," so that planned 
industrial projects in aluminum, steel and plastics can continue to 
be developed.  However, energy sector contacts point out that 
natural gas production is targeted to increase to 5.9 bcf per day 
over the next few years, putting further pressure on reserves. 
 
--------------------------------------------- ----- 
¶3.  T&T Energy Conference charts policy directions 
--------------------------------------------- ----- 
 
Prime Minister Patrick Manning chaired a high-level long-term vision 
and strategy development conference for the T&T energy sector August 
13-14.  Following on the heels of news that exploration is not 
keeping pace with gas production, the conference featured 
presentations from representatives of foreign and local energy 
companies, discussion of global trends, and proposals for new energy 
sector policies.  Local industry speakers recommended more favorable 
tax and production sharing terms to stimulate exploration.  Experts 
also discussed the prospects for merging state-owned energy 
companies into a single entity capable of competing for 
international oil and gas development opportunities, an issue PM 
Manning had tabled for consideration in March 2007.  Manning 
concluded the conference by stating that adjustments to GOTT energy 
policy will be announced in early in 2008.  Since then the oil and 
gas industry has been publicly and privately advocating adjusting 
the GOTT tax regime to encourage more exploration. 
 
----------------------------- 
¶4.  Chile joins the LNG queue 
----------------------------- 
 
Chilean Ambassador to T&T Gabriel Zapeda told local media that Chile 
is looking at T&T as a potential source of energy, in the event a 
fifth LNG train becomes a reality.  Zapeda said that sourcing LNG 
from Trinidad would help Chile diversify and reduce its dependence 
on natural gas from Argentina.  Zapeda said that with Chile 
experiencing one of its coldest winters, energy security is a 
constant source of concern.   British Gas and the Ministry of Energy 
have embarked on an 18-month exercise to determine the feasibility 
of a fifth train, but industry contacts agree that it will not move 
forward absent new discoveries or progress in negotiations with 
Venezuela to develop large cross-border gas fields. 
 
--------------------------------------------- ------- 
¶5.  Uganda seeks T&T help to manage oil/gas reserves 
--------------------------------------------- ------- 
 
During a visit to T&T in July, Uganda's Foreign Affairs Minister Sam 
Kutesa asked for assistance from T&T's experts to develop and manage 
his country's oil and gas sector in order for Uganda to achieve a 
 
PORT OF SP 00001203  002 OF 002 
 
 
sustainable economy.  During Ugandan President Yoweri Museveni's 
August visit to Trinidad, Manning announced that T&T would be 
providing free expertise to Uganda's energy-based industries. 
Whether this offer of assistance becomes concretized remains to be 
seen. 
 
--------------------------------------------- ----- 
¶6.  Experimental methanol power plant commissioned 
--------------------------------------------- ----- 
 
On July 25, then-Energy Minister Lenny Saith commissioned a new, 
state-of-the art 8.39 megawatt demonstration power plant at the 
Point Lisas Industrial Estate that will use methanol to generate 
electricity.  This experimental plant, a joint venture between the 
University of Trinidad and Tobago (UTT) and Methanol Holdings 
Trinidad Limited (MHTL), will generate electricity for two of MHTL's 
existing methanol plants using a specially modified standard gas 
turbine.  If successful during its two-year trial period, the 
project will provide the technology for utilizing methanol as a fuel 
and will establish a chemical specification for fuel grade methanol. 
Minister Saith underscored that this initiative could provide the 
Caribbean region with a cheaper source of energy.  T&T is the 
world's leading exporter of methanol. 
 
------------------------------------------- 
¶7.  British Gas expanding on-shore Trinidad 
------------------------------------------- 
 
British Gas (BGTT) reported progress in its quest to find new 
on-shore natural gas reserves in Trinidad.  Of two exploratory wells 
drilled on the central south coast of Trinidad (Central Block, St. 
Mary's, Moruga), the Baraka East-1 well encountered and tested for 
gas accumulation and is now undergoing an intense feasibility study, 
while the Corosan NE-1 well proved unsuccessful.  BGTT plans to 
carry out a 3D seismic survey over the southwest half of Central 
Block, which could lead to additional exploration wells. 
Construction of a BGTT gas processing plant in the Central Block is 
80% complete; the installation will handle up to 65 million cubic 
feet of gas per day, feeding into the cross-island pipeline system 
that supplies Atlantic LNG. 
 
AUSTIN