Trinidad invites proposals
for $B ethylene plant

Trinidad and Tobago will soon expand its downstream petro-chemical industrial base to include a multi-billion dollar ethylene complex by the year 2005.

Ethylene is an important raw material for the production of high quality plastic products such as PVC, surgical equipment, plastic bags, safety equipment and household utensils.

"With the installation of an ethylene cracker and its supporting industrial complex, we will be able to monetise much of the ethane that is created when natural gas and crude oil is processed into value added products," says Trinidad and Tobago's Energy Minister, Finbar Gangar.

"The establishment of an ethylene complex was not previously viable due to insufficient feedstock," adds the Minister. However, given the projected increase in demand for gas (inclusive of liquefied natural gas (LNG)) and the pooling of ethane streams from Atlantic LNG, Phoenix Park Gas Processors and Petrotrin, we are optimistic that the critical mass of ethane feedstock will be available to make a world-scale ethylene cracker viable by 2003."

He said the expected capacity of the ethylene cracker and polyethylene plant will be at least 750,000 tonnes per year, requiring an investment of US$1 billion.
"If the project is successful, it can open a whole new realm of opportunities for Trinidad and Tobago. There would be new job opportunities in construction and in the operation of the new facility. As a downstream commodity, ethylene will contribute significantly to this country's foreign exchange earning capability, as well as provide opportunities along the value chain in the production of consumer goods."

Minister Gangar said proposals were invited in April 1999 from Equistar and the Nova Chemical Corporation for the construction and development of the facility. The deadline for responses was July 30.
He said Trinidad and Tobago was very optimistic about the future development of the natural gas industry as the capital costs and the time frame of the development phases of natural gas projects like Atlantic LNG continue to decrease. This creates investment opportunities for smaller export projects and the development of a cash or spot market for these new natural gas products.

"The development of an active immediate spot market, with more exporters and importers, will improve utilization rates on expensive fixed liquefaction and transport capacity and reduce risk on new project development," says Minister Gangar.
"Markets for premium-priced clean fuels are expected to expand to include not only Europe and North America but also markets such as Brazil in South America, which is using more natural gas for electricity and iron ore production than its local industry can support.

"Trinidad and Tobago is the fastest growing economy in the Latin American and Caribbean region," he said. "We possess the most diverse and energetic oil and gas-based industrial sector in the world. And, investments in the oil & gas sector from 1996 to 2001 are estimated to surpass US$5 billion.

One sign of the growth of the natural gas industry in Trinidad and Tobago is the activity in the upstream sector. The number of new wells completed as gas producers in 1998 surpassed the number of new wells completed as oil producers. This trend is expected to continue as methods of capturing stranded gas become more cost effective and this country's proven reserves continue to expand, he said.

"In November 1998, proven reserves stood at eight trillion cubic feet. Today the figure is in excess of 21 trillion cubic feet, with the latest discovery being announced in May 1999 by a consortium of BHP, Elf Aquitan and Talisman.

Natural gas is the fastest growing sub-sector of the hydrocarbon industry. By the year 2000, local natural gas consumption is expected to reach 1.4 billion cubic feet per day - an increase of more than 70 percent over the last five years. Some 450 million cubic feet of this will be for LNG exports with additional supplies for power generation, feedstock to new petrochemical plants and fuel for additional metal furnace plants.

The energy minister said there is considerable potential for further downstream activities and the government intends to explore these prospects, particularly for ethylene-based industries.

Executive Time "Online" also has a printed version which is available throughout the Caribbean and some selected North American cities.