CSME Integration Possibilities - An Oil and Gas Perspective

1. CSME Integration Possibilities - An Oil and Gas Perspective T. M. Boopsingh Sherbourne Conference Centre Barbados, 29th June 2006

2. Outline • International Energy Overview -Geographic,Economic and Global Realities • A Brief Review of Inputs- Geographic and Regional Overview - The Trinidad and Tobago Downstream industry - A Regional demand Analysis • The Way Forward– Regional & National Issues - The Opportunities

3. International Energy Overview Section 1

4. International Perspectives- The Region in the World • Western Energy Security • World Economic Growth China &Indiamake the new difference • Saudi vs Iraqi Resources • US vs European/Japanese Interests • Russian Oil and now GAS • Other US Needs, Interests & Inputs Imports, Transportation, Sales, Technology

5. The Caribbean’s Energy Needs • Bulk vs Supplemental • Urban vs Rural • Primary vs Secondary Energy • Electricity vs Transportation • Medium term vs Long term

7. World Energy Demand to 2025 Source: U.S. Census Bureau 2004; EIA, International Energy Outlook 2004

8. Projected Contributions from "New" Renewable Energy Sources in 2020 ETW "Minimum"ETW "Maximum"Mtoe% of totalMtoe % of total Modern biomass 243 45 561 42 Solar 109 20 355 26 Other (wind, geothermal, small hydro, waste) 187 35 429 32 Total 539 100 1345 100 % of TotalPrimary Energy Consumption 3-48 -12 Source: WEC’s ETW 2000.NB. In 1990 new renewables contributed 164 Mtoe (1.9% to total energy demand).

9. The Coming Age of Natural Gas • Infrastructure issues • Gas Hydrates • Fuel Cells

10. Sources of Production for the Caribbean Sections 2a & 2b

11. The Sources of Energy - Geographically • US Gulf Coast • Venezuela* • Trinidad and Tobago# - CSME member • Colombia • Mexico* • West Africa# • Other, inc.Brazil, Ecuador, Middle East, etc. * Oil Exporter # Oil & Gas Exporter

12. Petroleum Products Oil, Products & LNG Oil & Petroleum Products

13. T&T - Existing Gas Based Plants • 1 Natural Gas Liquids Processing Facility • 4 LNG Trains (2300 MMscfd) • 9 Ammonia Plants (4,485 MTPA) • 1 Urea Plant (550 MTPA) • 5 Methanol Plants (2,960 MTPA) • 4 Iron and Steel Mills (2,560 MTPA) • 4 Power Generation Plants - Powergen (3) & Inncogen • 1 Offshore Platform Fabrication Yard • Other • Refinery • Cement Manufacture • Light Industrial/Commercial Consumers - 96 • 2 Gas Fired Air Cooling Projects • 4000 CNG powered vehicles

14. 4 LNG Trains

15. Liquefying Natural Gas

16. TT / Venezuelan Cross-Border Drilling

17. Pricing Natural Gas in T&T • Net back Pricingbased on Product sales prices – LNG, Methanol, Ammonia, • Alternate Fuel Pricinge.g. Fuel Oil/Crude Oil • Net back Pricingbased on Product sales prices- Steel; Aluminium ? • Domestic Pricing -TTEC, Small Manufacturers.

18. Proposed New Plants in Trinidad • Alutrint Aluminium Smelter • Aluminium Wire, Rods, Wheels, Parts • AnsaMcal/Terra UAN Ammonia complex • Clico Energy et. al. UAM Ammonia complex • Eastern Caribbean Gas Pipeline • Alcoa Smelter • New Refinery at Pointe-a-Pierre • Westlake Ethylene Complex, etc,

19. A Demand Analysisin the CaribbeanSection 2c

20. Role of Indigenous Resources in Meeting Energy Demand - 2000 Source: T.A. Byer

21. Petroleum Product Demand in 2000 (BBls/Day)– North Caribbean Markets Source: T.A. Byer

22. Petroleum Product Demand in 2000 (BBls/day)– Eastern Caribbean Markets Source: T.A. Byer

23. Conclusions of Macro-Economic & Petroleum Demand Analysis • Power Sector is the prime activity for displacing liquid fuels – represented by few corporate entities which facilitates implementation • Transport sector fuels – gasoline, Avjet and diesel oil – substitution more difficult. Source: T.A. Byer

24. The Eastern Caribbean Pipeline

25. Final System Layout Technical Considerations • Larger markets and less risky service via Easternsegment to Barbados • Western segment’s small diameter (5”) facilitates minimizing impact of geo-technical hazards in servicing Grenada and St Vincent. Not Commercial. • Interconnect point in Martinique to re-distribute to Central& Northern systems • Access to Fort de France markets • More difficult subsea terrain characterizes Northern route to Guadeloupe and Dominica Northern Central Western Eastern

26. T&T – Its Role in the Hemisphere • US LNG Imports • Largest world Ammonia and Methanol exporter • Deep Water Prospects

27. U.S. LNG Imports BCFD 20 18 16 14 12 10 Projected Range of Imports 8 6 4 2 0 2000 2005 2010 2015 2020 Cambridge Energy Research Associates “New Realities, New Risks: North American Gas and Power Scenarios Through 2020”

28. Slide 21 of 31

29. T&T - Its Role in the Region • US LNG Imports • US Ammonia & Methanol Imports • Deep Water Prospects • Location re Venezuela • Caribbean Refining Center • Small and Strategically positioned

30. Regional Structures and Issues Section 3

31. The Way Forward • Long Term – 1.Solarinc. Photo Voltaic 2. Otherinc. Conservation, Energy Security, Diversification Private Capital - The key to prioritization • Medium Term – Natural Gas & Bio-fuelsa) Eastern Caribbean Pipeline b) LNG for Northern Caribbean • Domestic Demand Management inc. Price Differentiation, Supply Diversification, Affordability, Trade Cooperation, Conservation

32. Regional and National Structures • REAP – a critical Institutional product • Cooperating within the ACS • Using Market related pricing • Partnering J/V’s and/with IOC’s • Facilitate Refining, Shipping & Trading • Establish credible Regulatory Agencies

33. New downstream potential • Steel and Steel products • Aluminium and its products • Gas based Petroleum Products • Natural Gas in Cooling • CNG in land transportation • Ethylene based Plastics

34. New Trading potential • Alumina and Aluminium products • Forest and wood products • New Petroleum Products • Fertilisers and by-products • Plastics

35. THE END Oh to be like this! Thank Thank you for your attention. ur attention.