TRINIDAD GASBAG - ENERGY SECTOR NEWS (#2-06)

UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000587 SIPDIS SIPDIS E.O. 12958: N/A TAGS: EPET EINV EIND TD SUBJECT: TRINIDAD GASBAG - ENERGY SECTOR NEWS (#2-06) Following are recent developments in Trinidad's energy sector, as gleaned from local media and other Embassy sources. In this edition, we report on the following: (1) U.S. company signs MOU for ethylene complex (2) Petrotrin officials to visit Haiti (3) FM Gift sees advantage in Bolivian problems (4) New $1.5 billion methanol plant to make melamine (5) More billion-dollar plants coming -------------- ¶1. U.S. company signs MOU for ethylene complex -------------- Texas-based Westlake Chemical plans to build a US$1.5 billion ethylene plant in T&T. Westlake CEO Albert Chao signed a memorandum of understanding with Energy Minister Lenny Saith on April 18 for the plant, which would use 37,500 barrels of ethane a day to produce 570,000 metric tons of ethylene a year. It will begin producing ethylene in 2010, according to Saith, who added that T&T has an option of acquiring 30 percent of the plant. Pending approval from government regulators, construction could begin in September 2007. A company rep told Econ Chief in January that Westlake is one of four companies that construct most of the ethylene crackers in the industry, and that the MOU would enable the company to undertake a full study of the project before making a final decision early next year. -------------- ¶2. Petrotrin officials to visit Haiti -------------- A team of Petrotrin officials will visit Haiti following inauguration of Rene Preval as president. Foreign Minister Knowlson Gift announced on May 4 that T&T has several bilateral agreements with Haiti that include oil and natural gas. He said a team from Petrotrin had been in Haiti last year to examine energy needs, such as terminals and connections ("hookup") for oil and gas. The planned visit anticipates a return of Haiti to membership in CARICOM in July. He observed, "The situation in Haiti has greatly stabilized." -------------- ¶3. FM Gift sees advantage in Bolivian problems -------------- Foreign Minister Knowlson Gift said on May 4 that Bolivia's recent nationalization of its natural gas industry could be positive for the liquefied natural gas (LNG) industry of T&T. Gift said at a weekly press conference that the nationalization now causes long- term problems for the "energy security" of the hemisphere. Apparently noting global news reports that the Bolivian government action might cause a crisis, Gift said, "The disruption of Bolivia's natural gas fields could put Trinidad and Tobago at an advantage." -------------- -------------- ¶4. New $1.5 billion methanol plant to make melamine -------------- -------------- Energy Minister Lenny Saith turned over the first spade of earth for a US$1.5 billion complex of Methanol Holdings (Trinidad) Ltd. (MHTL) plants. According to MHTL, the methanol plant in the complex is the fifth for the company and will make it the second largest methanol producer in the world. The new complex will produce melamine and urea ammonium nitrate (UAN) for the first time in T&T. There will be seven plants in all: ammonia (1850 metric tons/day); urea (2076 mt/d); nitric acid (1500 mt/d); ammonium nitrate (1905 mt/d); urea ammonium nitrate mixing (4300 mt/d); and two 90- ton/day melamine plants. The government foresees melamine being the source of new plastics-based industry in T&T in furniture and construction. MHTL is a joint venture between CL Financial of T&T and several German companies that operate as Consolidated Energy Ltd. -------------- ¶5. More billion-dollar plants coming -------------- Energy Minister Lenny Saith outlined plans for further billion-dollar energy-based industrial plants during the methanol complex groundbreaking event in the preceding paragraph. In line with GOTT determination PORT OF SP 00000587 002 OF 002 that future plants must include downstream components, Saith said there would be an US$1.4 billion polypropylene complex that will provide the raw material base for manufacture in T&T of consumer products. That project has not yet been awarded. Meanwhile, Saith said the US$1.2 billion iron/steel complex by Indian company Essar will produce steel plates that can be used in new industries in T&T. AUSTIN