Forthcoming petrochemical plant could be catalyst for industrial resurgence

The signing of the project agreement (PA) for Caribbean Gas Chemical Ltd.’s US$950 million gas-to-petrochemicals complex at the Union industrial estate, La Brea, strongly indicates that Trinidad and Tobago’s much-acclaimed gas-based heavy industrial programme is back in business after a five-year hiatus.

Caribbean Gas Chemical Ltd. is owned by Mitsubishi Gas Chemical Co. Inc., Mitsubishi Corporation, Massy Holdings and the National Gas Co., the latter representing the government’s interest in what will be a groundbreaking downstream investment.

More than 5 million tonnes a year of methanol is already produced in Trinidad and Tobago, but this project goes well beyond methanol into new areas. Part of the production of 1 million tonnes of methanol will be diverted to produce dimethyl ether (DME) for the first time in the country.

DME is known as a “green molecule” and can be used in transport as a replacement for diesel – much-needed among the country’s diesel-using vehicles because of the latter’s pollution effects.

China has been in the forefront of countries which have adopted the use of DME in transport, along with Japan and Sweden.

DME is also used in power generation and could be substituted for the diesel now used in some Caricom electricity plants that might prefer it to LNG, which the Ministry of Energy and Energy Affairs (MEEA) has been promoting through the newly-established Caribbean Energy Thematic Fund.

Energy and Energy Affairs Minister Kevin Christian Ramnarine has reminded us that the last natural gas master plan, drawn up by Gaffney Cline and Associates in 2002, specifically recommended the introduction of DME into the local energy landscape.

“The government should consider a major initiative for the expansion of natural gas use through natural gas-based fuels such as DME and fuel-grade methanol in the Caribbean,” it suggested.

MEEA itself has said little about fuel-grade methanol as a substitute for fuel oil and diesel, but this possibility has been put forward consistently by Trinidad and Tobago businessman George Naime at every conference to which he has been invited to speak.

Caribbean Gas Chemical has also pledged to look seriously at a second-phase expansion programme beyond DME to include the production of monoethylene glycol (MEG) from syngas and/or ethane extraction.

This would be a major development if it happens, as MEG can be used to produce automotive coolants, polyester fibre and PET resins.

Though the gas-to-petrochemicals complex is the first of a new generation of downstream, gas-based projects to arrive at the project agreement stage, it is not by any means the only new one under consideration.

National Energy (NE) is also pursuing other projects, including inorganic chemicals, methanol to polyolefins (plastics), steel processing, silico-manganese refining and single-cell protein production (a pilot plant already exists).

The list does not include the midscale Caribbean LNG plant across the road from Union at the Labidco industrial estate, which NE has been helping to bring to fruition and in which it may possibly be a shareholder.

What’s more, NE is now casting its net into the wider Caricom region and recently embarked on a Suriname Engagement Strategy (SES), under which it will offer its expertise in such areas as “energy policy, the establishment of logistical ports, harbours and industrial estates for energy-based projects,” according to NE’s president, Dr. Vernon Paltoo.

Suriname is not much of a gas producer at the moment, but it could discover gas during its offshore exploration programme and will then be faced with the challenge of how to monetise it.

The new “logistical port” at Galeota, in southeast Trinidad, funded by NE to the tune of US$85 million, is designed to play an important role in NE’s Caribbean outreach. In recent weeks, NE has been advertising for “interested contractors” to join it in “managing and operating the port of Galeota.”