TRINIDAD GASBAG - ENERGY SECTOR NEWS (#3-07)

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E.O. 12958: N/A
TAGS: ENGR EPET EIND TD
SUBJECT: TRINIDAD GASBAG - ENERGY SECTOR NEWS (#3-07)

In this edition, we report on developments in the Trinidad & Tobago
(T&T) energy sector during the third quarter of CY-2007:


1. bpTT, Energy Minister comment on Gazprom rumor

2. Gas audit: proven reserves down to 12 years

3. T&T Energy Conference charts policy directions

4. Chile joins the LNG queue

5. Uganda seeks T&T help to manage oil/gas reserves

6. Experimental methanol power plant commissioned

7. BG explores for gas on land

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1. bpTT, Energy Minister comment on Gazprom rumor
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Responding to international press reports that British Petroluem is
offering a stake in T&T's Atlantic LNG to Russia's Gazprom, local
subsidiary bpTT described the reports as "pure speculation" and
declined to comment. Then-Energy Minister Lenny Saith subsequently
stated that any such deal would be subject to GOTT approval. bpTT
produces roughly half of T&T's natural gas and owns between 34% and
42.5% of each of the four LNG trains comprising Atlantic LNG's
operations, which collectively supply two thirds of US LNG imports.
The other shareholders in ALNG are British Gas, Repsol (Spain) Suez
LNG (France),and T&T's National Gas Corpoation (NGC).

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2. Gas audit: proven reserves down o 12 years
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According to the Ryder Scott audit ofT&T's natural gas reserves at
end-2006, T&T's prven reserves of LNG have declined by 11 per cent
ince end-2004, with a reserves/roduction ratio of approximately 12
years based on current production of 3.8 billion cubic feet (bcf)
per day. Responding to the announcement of the audit results, Prime
Minister Manning asserted that future exploration, including eleven
wells currently on the drawing board, will result in the proving up
of reserves currently classified as "probable," so that planned
industrial projects in aluminum, steel and plastics can continue to
be developed. However, energy sector contacts point out that
natural gas production is targeted to increase to 5.9 bcf per day
over the next few years, putting further pressure on reserves.

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3. T&T Energy Conference charts policy directions
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Prime Minister Patrick Manning chaired a high-level long-term vision
and strategy development conference for the T&T energy sector August
13-14. Following on the heels of news that exploration is not
keeping pace with gas production, the conference featured
presentations from representatives of foreign and local energy
companies, discussion of global trends, and proposals for new energy
sector policies. Local industry speakers recommended more favorable
tax and production sharing terms to stimulate exploration. Experts
also discussed the prospects for merging state-owned energy
companies into a single entity capable of competing for
international oil and gas development opportunities, an issue PM
Manning had tabled for consideration in March 2007. Manning
concluded the conference by stating that adjustments to GOTT energy
policy will be announced in early in 2008. Since then the oil and
gas industry has been publicly and privately advocating adjusting
the GOTT tax regime to encourage more exploration.

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4. Chile joins the LNG queue
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Chilean Ambassador to T&T Gabriel Zapeda told local media that Chile
is looking at T&T as a potential source of energy, in the event a
fifth LNG train becomes a reality. Zapeda said that sourcing LNG
from Trinidad would help Chile diversify and reduce its dependence
on natural gas from Argentina. Zapeda said that with Chile
experiencing one of its coldest winters, energy security is a
constant source of concern. British Gas and the Ministry of Energy
have embarked on an 18-month exercise to determine the feasibility
of a fifth train, but industry contacts agree that it will not move
forward absent new discoveries or progress in negotiations with
Venezuela to develop large cross-border gas fields.

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5. Uganda seeks T&T help to manage oil/gas reserves
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During a visit to T&T in July, Uganda's Foreign Affairs Minister Sam
Kutesa asked for assistance from T&T's experts to develop and manage
his country's oil and gas sector in order for Uganda to achieve a

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sustainable economy. During Ugandan President Yoweri Museveni's
August visit to Trinidad, Manning announced that T&T would be
providing free expertise to Uganda's energy-based industries.
Whether this offer of assistance becomes concretized remains to be
seen.

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6. Experimental methanol power plant commissioned
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On July 25, then-Energy Minister Lenny Saith commissioned a new,
state-of-the art 8.39 megawatt demonstration power plant at the
Point Lisas Industrial Estate that will use methanol to generate
electricity. This experimental plant, a joint venture between the
University of Trinidad and Tobago (UTT) and Methanol Holdings
Trinidad Limited (MHTL),will generate electricity for two of MHTL's
existing methanol plants using a specially modified standard gas
turbine. If successful during its two-year trial period, the
project will provide the technology for utilizing methanol as a fuel
and will establish a chemical specification for fuel grade methanol.
Minister Saith underscored that this initiative could provide the
Caribbean region with a cheaper source of energy. T&T is the
world's leading exporter of methanol.

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7. British Gas expanding on-shore Trinidad
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British Gas (BGTT) reported progress in its quest to find new
on-shore natural gas reserves in Trinidad. Of two exploratory wells
drilled on the central south coast of Trinidad (Central Block, St.
Mary's, Moruga),the Baraka East-1 well encountered and tested for
gas accumulation and is now undergoing an intense feasibility study,
while the Corosan NE-1 well proved unsuccessful. BGTT plans to
carry out a 3D seismic survey over the southwest half of Central
Block, which could lead to additional exploration wells.
Construction of a BGTT gas processing plant in the Central Block is
80% complete; the installation will handle up to 65 million cubic
feet of gas per day, feeding into the cross-island pipeline system
that supplies Atlantic LNG.

AUSTIN