Jitsumatsu: T&T met all our conditions for investment
Despite concerns about the availability of natural gas, Mitsubishi Corp. is confident it made the right decision settling on Trinidad as the best location for its new US$1 billion methanol and dimethyl ether (DME) plant, which will be built at the Union Industrial Estate, La Brea.
“Through our global experiences, we believe the following factors are important when we look at new projects: reliable people and government with a clear, consistent policy in supporting the project; strategic location; industrial experience of the country; strength in the supply of raw materials, infrastructure and utilities.
Trinidad was a rare country which met with all these conditions,” said Chikara Jitsumatsu, Director of Caribbean Gas Chemical Ltd., the joint-venture company of the Japanese-led consortium.
On April 13, Mitsubishi Corp. (MC) and subsidiaries Mitsubishi Gas Chemical (MGC) and Mitsubishi Heavy Industries (MHI), along with local partners the National Gas Company of Trinidad and Tobago (NGC) and Massy Holdings, signed a project agreement with the government to build the DME plant.
The complex will be owned by Caribbean Gas Chemical in which MGC and MC each have a 26.25 percent stake, MHI 17.5 percent, NGC 20 percent and Massy 10 percent.
It will be designed to produce 1 million m.t./year of methanol and 20,000 m.t./year of DME.
MGC, MC and Massy will market the facility’s methanol worldwide. The partners will also work closely with the T&T government to promote DME as a substitute for diesel in Trinidad and Tobago and in other Caribbean countries.
The deal is especially significant given the lack of new downstream projects in Trinidad over the past decade and persistent concerns over the availability of gas.
“We recognised the difference between current ongoing supply system issues and long-term gas reserve issues. Both need to be improved to attract the investment, but we understand the country has been making strong efforts to attract the re-establishment of buffer supply system as well as further upstream developments. It may take some time till we see the effect of these efforts, and this makes the investment decision-making very difficult, but after negotiations we are confident with the arrangement,” said Jitsumatsu.
Plant design and construction will be undertaken by MHI and is expected to significantly boost construction employment.
Finance Minister Larry Howai was equally confident at the signing ceremony: “During the construction phase, this methanol/DME complex will generate some 3,000 construction jobs,” Howai said.
Meanwhile, discussions are under way with a syndicate of Japanese banks to finalise the loan agreement, according to a Mitsubishi company statement.
Notwithstanding the importance of the project to Trinidad, Jitsumatsu acknowledged that his company faced some setbacks in getting environmental clearance.
“Mitsubishi does not have an office in Trinidad, so everything has been quite new to us. It took us approximately 20 months to obtain Certificate of Environmental Clearance (CEC) and it took us two years from Project Development Agreement to Project Agreement,” he said.
But Merlyn Rennie-Browne, acting Vice President of Energy Development at National Energy, which has been mandated to further develop the country’s gas-based energy industry, said delays with the CEC were justified given the scope of the DME project.
“For major projects, the Certificate of Environmental Clearance tends to be a major hurdle to cross and we believe that the project attaining its CEC in the timeframe that it did, with relative ease, is testament to a true partnership between National Energy, the investor and community.”
Commenting on the country’s competitiveness Rennie-Browne said T&T’s energy sector “has been subject to extreme global competitive pressures for foreign direct investments” with the emergence of new supply regions around the world.
“We recognise the challenges faced but still believe we are competitive in a dynamic global environment. We need to be innovative and forward thinking in order to continue to be an attractive energy investment destination,” Rennie-Browne said.