Developing the downstream energy sector is high on Government's list of priorities regarding diversifying the economy and as such, the Ministry of Energy is seeking to enter into a more favourable partnership that will facilitate this.
This was stated in a ministry press release yesterday following the scrapping of a $30 billion methanol project in Trinidad and Tobago which this country was negotiating with Saudi Basic Industries Corporation (SABIC) and its Chinese partner Sinopec.
In the release, the ministry said all parties "mutually agreed to discontinue negotiations for the construction of a methanol to olefins and methanol to petrochemicals complex, as the parties could not reach agreement on the fundamental issues of natural gas price and the term of supply."
The ministry said SABIC and Sinopec, in a letter on January 17 indicated, "Should the circumstances change, SABIC-Sinopec would be interested to pursue renewed discussions with the objective to invest in manufacturing of value added chemicals and plastics in your country."
Discussions began in February 2012 when the ministry informed the consortium it had been the preferred bidder for the methanol to olefins project and a methanol to petrochemicals project.
"After several months of candid discussion, the parties mutually agreed to suspend negotiations in the absence of a consensus on a gas supply contract," the ministry said.
Meanwhile, energy expert Anthony Paul said yesterday the Government has no clear strategy for engaging downstream investment.
In a telephone interview with the Express, Paul, the managing director of the Association of Caribbean Energy Specialists (ACES), said the Government talks about policies and priorities but just seems to do what comes to mind on any given day, and responds to tenders without a comprehensive understanding of what it is doing.
"We need to take a comprehensive look at the industry; there are already lots of methanol plants in Trinidad. What they could do is to make the methanol suppliers make products available to downstream users. None of the contracts make product available to downstream users," Paul said.
He continued, "What the government lacks is a comprehensive approach to the industry that will factor in getting the best tax rate; the best price; and the best value added downstream. What it has been doing is depending on foreign investors, and so, have to be dependent on what they want. In the real world governments have a say. I worry that we have given up so much value. What happened to SABIC in this deal?"
Paul was also concerned about the impact on investment. "Our reputation is so bad. Nobody is seriously looking at investing in Trinidad because there is no clarity that decisions (on the industry) can and are being made," he said.