Trinidad and Tobago: Prime Minister Dr. Keith Rowley delivered the feature address at the Opening Ceremony for the NIQUAN Energy Trinidad Ltd. Gas To Liquids (GTL) plant today (Monday 08th March 2021).
He extended his heartfelt congratulations to all of the teams involved in making this project a reality, from the executive teams at NiQuan, the Trinidad and Tobago Upstream Downstream Energy Operations Company Limited, and the Ministry of Energy and Energy Industries, to the financiers and contractors.
Throughout our tenure thus far, we have displayed pragmatism and transparency, time and time again, as we tackle and solve specific individual problems.
The internal management of the project by Petrotrin and WGTL was an undeniable failure, and this remains true. However, the gas-to-liquids plant, the Petrotrin, and the WGTL failure were not the end of the road. The regime set out to make the best of a situation over which we had little control in the past.
Recognizing the NiQuan project as an opportunity for the country to gain some benefit from an investment that otherwise could not have been operationalized, the Government facilitated this project by sourcing and securing a supply of gas to the plant, to a maximum of 31 mmscf per day, through the Trinidad and Tobago Upstream Downstream Energy Operations Company Limited. The Minister of Energy and Energy Industries has already expanded on this in some detail.
When we say here today that this Gas-to-Liquids plant is a success, people may ask what is successful about a plant that started construction in 2007 and has only recently been completed in 2021? What is there to commemorate a project that was once plagued by delays and cost overruns? So let me briefly outline the victories of NiQuan and this gas-to-liquids plant.
If the project was written off as a failed attempt, there was nothing to be had except permanent financial losses, finger-pointing, and political grandstanding, as was the case before this initiative. Thankfully there was another option.
I will begin with the financial benefits. In 2018 when NiQuan acquired the plant, Petrotrin received a cash payment of US$10 million, with the remaining US$25 million to be paid in Preference Shares. To complete the plant, a further capital injection of approximately US$125 million was required.
Additionally, the Government is expected to receive TT$2 billion in taxes and statutory payments over the project’s life. NiQuan’s investment represents the first significant private investment in the downstream energy sector in recent times, despite difficulties in the global markets.
Equally important was this Government’s ability to recognize when to take a step back and allow private investors to step up, which we are currently doing with the Guaracara Refinery.
This approach is in keeping with Theme IV of our National Development Strategy: Building Globally Competitive Businesses. While we will continue to provide support and make interventions where necessary, in forms that we, as the Government, deem appropriate, we must also know when to adopt a hands-off approach to allow private investors the opportunity to flourish, especially where the state has tried and failed.
This gas-to-liquids plant is a prime example of the successful development of the country’s export potential of higher value-added products through the collaboration of the private sector, the banking sector, and the Government. This is the manner of cooperation necessary to stimulate activity within our economy and aid in the country’s post-pandemic recovery.
NiQuan performed creditably and completed and commissioned this GTL plant through a partnership with highly experienced experts, such as BD Energy Systems, Black and Veatch Management Consulting, Halder Topsoe, and Emerging Fuels Technology, who are two of the world’s primary authorities in GTL technology, and last but not least, our very own Junior Sammy Contractors Ltd.
We are diversifying our current product slate through NiQuan’s GTL diesel and GTL fuel and stepping into a global market expected to grow at a Compound Annual Growth Rate (CAGR) of 7.5% over the period 2020 to 2025. The plant’s products, in particular the zero sulphur diesel, provide an excellent opportunity to monetize our natural gas resources through clean and environmentally friendly channels while creating value right here in Trinidad.
Against a backdrop of a rapidly transitioning world to cleaner sources of fuel, zero sulphur diesel is a welcome addition to the range of products originating from Trinidad and Tobago, especially in light of developments such as the IMO’s stricter sulphur regulations that came into effect in January 2020. As countries and organizations alike chart an accelerated course for a cleaner future, our product offerings must reflect the energy markets’ changing appetites.
Another success of this project was NiQuan’s management of the challenges presented by the COVID-19 pandemic. I understand that, like almost all other projects, both upstream and downstream, this project was not immune to the effects of the COVID-19 pandemic. I am sure that representatives from NiQuan can expound on the impact of the implementation of new public health regulations, which would have limited the number of people on-site; caused delays or limitations in the receipt of expatriate technical support due to travel restrictions; and disruptions in the global supply chain. I must commend NiQuan for endeavoring to source locally available alternatives and to mitigate delays in procurement.
So, ladies and gentlemen, when we label this project a success, it is not because we are ignorant of its history but rather because we are acutely aware of it. It was not a trivial task to turn what others viewed only as scrap metal into a revenue stream, an avenue to earn foreign exchange and a source of employment for many of our citizens.
The 700 plus persons employed during the construction, the 65 skilled workers who will be permanently employed, and the additional 650 persons who are indirectly a part of the supply chain would have already benefited from the economic activity spurred by NiQuan in the completion of this plant. I can hardly imagine that any of them would view this project as anything but a triumph. The government eagerly anticipates news of the first product shipment.