Trinidad Cuts Oil, Gas Budget Price Assumptions

(Argus, 25.Jun.2020) — LNG exporter Trinidad and Tobago has reduced the crude and natural gas price assumptions in its national budget.

According to the finance ministry’s mid-year economic review obtained by Argus, the country’s baseline scenario for macroeconomic conditions is now pegged to $45/bl for Brent and $2.90/MMBtu for the US gas benchmark Henry Hub, compared with a previous $60/bl and $3/MMBtu, respectively.

The economy will decline by 2.4pc in 2020 because of the lower energy prices, “rebounding to growth of 4.7pc in 2021,” finance minister Colm Imbert said in the report.

The business community says the government’s projections are still too optimistic.

“The outlook to rebound to 4.7pc in 2021 is aggressive in comparison to historical low growth trends, projected energy prices, sluggish global demand and containment measures that may have to remain in place until a vaccine is found for Covid-19,” private-sector lobby group TTCIC said.

US-Trinidadian chamber Amcham TT said Imbert’s projection cannot be sustained as gas production in first half 2020 was lower than a year earlier while gas prices are down significantly.

The country’s oil production in April of 60,321 b/d fell by 2.2pc from March, according to data released today by the energy ministry.

Gas production fell by 4.6pc to 3.4bn cf/d in the same period.

LNG production in April was down by 5.7pc to 2.4mn m³.

Cumulative January-April LNG output of 9.7mn m³ was little changed from a year earlier.

The April decline in LNG production is “a fair reflection of the state of global gas demand,” the ministry told Argus today. “We had feared a worse decline because of the state of the global market and the impact of the coronavirus pandemic.”

LNG is produced at the 14.8mn t/yr Atlantic liquefaction complex at Point Fortin in southwest Trinidad. Shell and BP are the leading shareholders in the facility.

LNG sales and deliveries from Atlantic in January-April were 215.4mn MMBtu, up by 1.4pc on the 2019 period.

The Atlantic consortium’s sales and deliveries of NGLs in the four-month period of 2020 totaled 1.4mn bl, little changed from a year earlier.

Trinidad is also a major producer of methanol and ammonia, but several plants are currently closed.

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By Canute James

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