TRINIDAD GASBAG - ENERGY SECTOR NEWS (#1-07)

UNCLAS PORT OF SPAIN 000556

SIPDIS

SIPDIS

STATE FOR EEB/ESC/IEC, WHA/EPSC, WHA/CAR
USDOC/ITA/MAC/LATIN AMERICA CARIBBEAN
DOE FOR OFFICE OF POLICY AND INT'L AFFAIRS

E.O. 12958: N/A
TAGS: ENGR EPET EIND EINV TD
SUBJECT: TRINIDAD GASBAG - ENERGY SECTOR NEWS (#1-07)

Following are recent developments in Trinidad's energy sector, as
gleaned from Embassy sources and local media. In this edition, we
report on the following:


1. LNG production down 25%

2. GE opens LNG service center

3. "T&T Gas to Barbados by 2009"

4. BG/Chevron sign gas supply deal with NGC

5. BG confirms small gas find

6. Petrotrin profits down

7. Petrotrin offshore platforms shut down

8. TOFCO labor woes

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LNG PRODUCTION DOWN 25%
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1. T&T's production of liquefied natural gas (LNG) decreased to 600
million metric cubic feet per day (MMCFD) from 800 MMCFD in mid-May
because of a faulty heat exchanger in Atlantic LNG's Train IV.
Local press reported on May 24 that the company had been awaiting
parts for two weeks. T&T is the largest supplier of LNG to the U.S.
The GOTT owns 11% of Train IV through the National Gas Company; the
other Train IV shareholders are British Petroleum, British Gas and
Repsol.

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GE OPENS LNG SERVICE CENTER
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2. General Electric Oil & Gas officially opened a US$400 million
service center at the Atlantic LNG plant at Point Fortin, Trinidad,
on May 9 in a ceremony attended by GOTT acting Energy Minister
Christine Sahadeo and General Electric corporate vice chairman John

G. Rice. The center will provide specialized repairs to 21
GE-manufactured turbines at ALNG on a 17-year contract that is
intended to minimize downtime. Rice's visit also sought to raise
GE's profile in Trinidad & Tobago as the country proceeds with an
aggressive gas-based industrialization program.

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"T&T GAS TO BARBADOS BY 2009"
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3. Trevor Boopsingh, chairman of the Eastern Caribbean Gas Pipeline
Company (ECGPC) predicted that Barbados will receive natural gas
from Trinidad & Tobago by 2009, after the Government of Barbados
approved the project on April 26. The US$550 million, 176-mile
pipeline from Cove Point, Tobago to Barbados should transport about
40 million cubic feet of gas per day, benefiting 13,000 households
in the first five years of the project. Having received a letter
from Barbados Minister of Energy Elizabeth Thompson, Boopsingh said
he would now seek approvals from authorities in Martinique,
Guadeloupe, and St. Lucia. He also voiced confidence that
commercial negotiations with all prospective customers would proceed
smoothly in view of recent high fuel prices.

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BG/CHEVRON SIGN GAS SUPPLY DEAL WITH NGC
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4. BG Trinidad and Tobago and Chevron Trinidad and Tobago Resources
signed a US$2 billion agreement with the GOTT's National Gas Company
on May 28 in Port of Spain for the sale of 220 million metric
standard cubic feet per day (MMSCFD) of natural gas. The supply of
the gas will start from January 1, 2009 and should run for 15 years,
ultimately commercializing up to 1.2 trillion cubic feet (TCF) of
gas from the Dolphin field off Trinidad's east coast. The project
will involve drilling and completion of four new wells along with
topside modifications on the Dolphin Platform, according to BG North
America Caribbean executive vice president Martin Huston.

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BG CONFIRMS SMALL GAS FIND
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5. British Gas confirmed reports that the company discovered a small
amount of gas in Moruga in the on-shore central block, in a well
drilled earlier in 2007. BG executives offered no figures as to the
size of the find but stressed that development in the central block
was proceeding as usual. Local press cited an anonymous energy
sector source as saying that "It's a good size find for that area.
It's not massive. The first field found was half a trillion cubic
feet. I suspect this one was slightly smaller."

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PETROTRIN PROFITS DOWN
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6. In financial results published May 24, Petrotrin reported
revenues reached an all time high of TT$25.8 billion (US$4.1
billion) in 2006, an increase of 27.5 per cent compared to 2005.
Nevertheless, the state-owned company's TT$1.3 billion (US$206
million) net profit was 18% lower than in 2005, a decrease ascribed
to a 35% higher GOTT take, higher cost of sales, a hike in operating
costs and disruption in operations due to work stoppages.
Petrotrin's financial report made no reference to the effects of
competition from Venezuela's PetroCaribe initiative, which is
enticing many of Petrotrin's traditional regional customers to buy
refined products from Venezuela's PdVSA instead.

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PETROTRIN OFFSHORE PLATFORMS SHUT DOWN
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7. State-owned oil company Petrotrin shut down seven offshore
platforms operated by its Trinmar subsidiary, according to May 26
press reports. The move came in the wake of an explosion on one of
the platforms earlier that week, in which a worker was killed and
two others were injured. Petrotrin, the parent company of Trinmar,
said the shutdown was to assess the integrity of the installations
on the platforms, which are in the Soldado field off Point Fortin in
the Gulf of Paria. A Petrotrin spokesperson said the shortfall from
the wells on the platforms would be compensated by an increase in
land production.

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TOFCO LABOR WOES
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8. Trinidad Offshore Fabricating Company (TOFCO) workers went on
strike May 16 seeking higher wages and better working conditions.
The company, which is situated in La Brea in southwestern Trinidad,
is involved in the construction of offshore oil rigs and provides
welding services to offshore platforms.

AUSTIN