Khan: Manufacturers must help bear burden of higher gas prices

ENERGY Minister Franklin Khan denied that TT faced any spectre of job losses due to concerns over the gas-supply to various industries, replying to an urgent question by Couva South MP Rudranath Indarsingh in the House of Representatives on Friday.

Khan said, “At this point in time there is no possible massive job losses in the manufacturing sector, be it the light manufacturing sector or the petrochemical sector at Point Lisas.” He said the National Gas Company (NGC) has always subsidised the supply to light-manufacturing sector. “Faced with the reality of a higher natural gas price from the upstream to the NGC, despite that the NGC will continue to offer subsidies to the local light manufacturing sector. However, there must be some adjustment to the burden and that is the basis by which the NGC is now negotiating with the light manufacturing sector to see how this burden could be adjusted amicably for both parties.”

Khan said talks were under way that for the petrochemical sector.

“Successful negotiations have been completed with CNC, N2000 and Nutrien, and the NGC are currently in discussion with MHTL which is part of the Proman Group.

“When that is completed, and my information is that it is looking that it will come to an amicable conclusion, most of the petrochemical plants at Point Lisas will have secure gas-supply contracts, both in terms of volume and price. So I don’t think there is any need to raise a red flag at this point in time, but as you all know the gas industry is a dynamic and we continue to monitor it.” Indarsingh asked about job-losses at the just-closed Yara plant.

Khan said that the plant was built in 1966 and was the most inefficient user of gas at Point Lisas. “It had served its term. The time had come with this new gas pricing scenario that it had come to the end of its life. It is not fundamental to the whole operation of Point Lisas. Put that in your pipe and smoke it.” Chaguanas West MP Ganga Singh rose to say he was not a smoker and asked the feasibility of low ammonia prices coupled with high gas prices, but Speaker Bridgid Annisette-George disallowed this query.

Pointe-a-Pierre MP David Lee in a fresh question asked if Heritage Petroleum has used any new exploration techniques since taking over production from the former Petrotrin.

Khan replied that Heritage has not drilled any exploratory wells but is continuing the process of doing studies, acquiring seismic data and building models, all of which precedes the actual drilling of any well. He hoped to drill before year-end. Naparima MP Rodney Charles asked specifically when the exploration and development projects will come to fruition.

Khan said, “The exploration process is very complicated. We are searching for new hydrocarbon reserves in a mature field that is 100 years old. You have to come up with new models to do it and that takes the acquisition of modern seismic data, and new concepts in terms of basin modelling and we need the right type of human capital.” He said Heritage has hired a good cadre of subsurface professionals and looks forward to joint ventures with Shell.

“There’s a lot of bright young engineers and geologists around. They were not being recruited. They are the ones who have the technological know-how to implement this programme. I have full confidence in this new generation of technocrats to deliver the results we are looking for.”