UNC: Downstream energy sector on brink of collapse

CLAIMING the downstream sector is on the brink of collapse due to an insufficient gas supply, Opposition MP David Lee is demanding answers from the government on the status of the Dragon Gas deal which is expected to provide additional supplies to keep the sector afloat.

Citing ambiguity over the licenses with the US that expire in April, Lee said, “We call on the Government to stop giving the people of this nation false comfort by saying our license with the US goes until 2025, and tell us if they have received any assurances that we will go beyond 2025 which is the key to get Dragon off the ground."

At a UNC briefing on February 18, Lee called for clarification on the 30-year Dragon deal agreement in light of a decision by Methanex to shut down its Atlas Mentanol Plant at Point Lisas.

He said over the years, the Government has been using the “Dragon Gas plaster” for every gas shortage problem, but the situation has now become dire.

“This week we received confirmation of catastrophic and financially crippling news for the national economy when the largest methanol producer in the world announced that it would shut down one of the largest methanol plants in the region, the Atlas plant based here in Point Lisas."

This decision, Lee said, “Is confirmation that the downstream sector under Energy Minister Stuart Young and this Government has all but collapsed. This is confirmation that our energy sector is still in trouble and collapsing despite all of the ‘old talk’ by the Government that they have stabilised the energy sector.”

Lee questioned the ramifications the closure would have for TT, pointing to the national revenue, tax revenue and even further significant reduction in foreign exchange, as methanol production will be reduced by at least one million tonnes per year.

He noted that the government has been trying to hoodwink the population into espousing the narrative that only old and inefficient plants, such as Yara, have shut down.

“Atlas is no old plant. It is a modern effective plant that has become a victim of a government that has failed to stimulate gas production throughout its entire tenure

“Atlas is shutting down as there is a gas shortage because this Government failed on deepwater bid rounds for over seven years only offering one last year.

“Atlas is shutting down as there is a gas shortage because this government has failed year after year to offer proper incentives for upstream companies to invest in exploration.”

He said natural gas production has dropped from 3.5 billion standard cubic feet to 2.6 billion standard cubic feet.

Given this situation, he surmised, “There can be no stability, security, or sustainability in the energy sector when we lose productive capacity when we witness the shutdown of a major plant and loss of revenue contribution to the national economy.