Liquefied Natural Gas (LNG) exports from Trinidad and Tobago to the United States are now attracting a price lower than the Henry Hub natural price on which this country’s national budget is partly based.
However, Energy Minister Kevin Ramnarine says there is nothing to fear since the US markets now comprise a minority of local LNG exports.
Trinidad and Tobago's LNG exports along with the taxes earned from the exploration of oil in the local land and marine reserves are the nation's main revenue earners.
The 2011/2012 budget is based on a natural gas price of US$2.75 per British thermal units (mmbtu) and an average oil price of US$75 per barrel.
Oil price averages have soared to US$100 a barrel in the past few months.
TV6 News reported last night that the Henry Hub international price of for Liquefied Natural Gas (LNG) on which the national budget is partly based has fallen from record highs of close to US$10 per mmbtu to an average of US$2.55 per mmbtu at the end of last week.
It averaged at $2.59 yesterday.
Chairman of the People’s National Movement (PNM), Franklin Khan, said its general council discussed the matter last Saturday as it is expressing its own concerns about the possible privatisation of Petrotrin and Trinmar assets.
“Largely because if you have been following the energy sector, oil prices have been skyrocketing while gas prices have remained soft and all this boast about the gas economy is turning out to be not as lucrative as it once was. Hence, the crown in the jewel is not so much gas now. It is oil,” Khan said.
Asked for a response, Ramnarine issued a brief comment yesterday expressing no concerns about the falling Henry Hub natural gas prices.
“While LNG prices in the USA have fallen below $3 per mmbtu this has little impact on our revenues from LNG. The majority of our LNG (81 per cent) is being sold to South America, Asia and Europe where prices are much higher than Henry Hub prices,” Ramnarine said.
Trinidad and Tobago's Point Fortin LNG terminal, Atlantic LNG stated it produced 14,664,884 mt of LNG in 2011.
The terminal is one of the world's largest producers of the gas product.