Riley: BHP gas find 'not small'

FORMER bpTT president Robert Riley has said BHP may have challenges with its recent gas find.

He was speaking on Thursday at the Institute of Chartered Accountants of TT's annual international finance and accounting conference at Hyatt Regency, Port of Spain.

Riley said a number of projects were implemented in response to the gas price hike in which TT was a big winner.There were eight or nine projects in the last year that await final investment decisions, he said.

Most people predict a return to decent gas prices that will support LNG production somewhere late in the 2020s ,he said, possibly 2028 or 2030.

"Precision around it depends on so many different factors. But that's what we are beginning to talk about."

He said there is going to be growth in gas and noted the "nice little finds" BHP has been talking about, including the 3.5 trillion cubic feet (tcf), which was "not a small one."

This week BHP Billiton announced a 3.5 tcf gas find in its northern blocks in the deepwater fields off the east coast of Trinidad. Pending financial approval to go ahead and commercialise the find, the company could begin producing up to 1.5 billion cubic feet per day (bcf/d) of natural gas by 2026.

Riley commented: "They will need extremely strong pricing and large volumes to make that work. And we are talking about making investment decisions in 2022.

"But I suspect they will be challenged because they will look and they will see that the ways that we can move that gas into market, LNG being a very big factor, will still be in some crisis then."

He said as LNG starts to fall back in competitiveness and energy costs are larger, with deepwater being extremely expensive and difficult to make work, TT will have to look at other options.

The natural gas price at Henry Hub increased from a low of $2.29 in July 2019 to $2.77 per mmbtu this month.