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Gas, petrochemical output increase in time for budget
With the 2018 Budget presentation weeks away, Finance Minister Colm Imbert has some good news from the energy sector. Figures show that the efforts by the oil and gas companies and the government to increase natural gas production have started to bear fruit.
The Ministry of Energy and Energy Industries is reporting that there was an 11 per cent increase in natural gas production in July compared to June.
In July natural gas production averaged 3.5 billion standard cubic feet per day, an increase of 335 million standard cubic feet per day (mmscf/d) when compared to June’s production.
To put the increase into perspective, it should be noted that production of natural gas had increased in June to 3.175 mmscf/d from May’s production of 3.034 mmscf/d and July’s production is 320mmscf/d more than the average production for the year.
According to the ministry, “Natural gas production increased by 11% to 3,510 mmscf/d as a result of increased output from bpTT, Shell, Petrotrin, Petrotrin Trinmar and BHP.
Similarly, natural gas sales increased by seven per cent to 3,288 mmscf/d as all companies with the exception of Petrotrin experienced increased sales for the month.”
There was also an increase in natural gas usage with liquefied natural gas (LNG) remaining the largest user of natural gas for the month, accounting for 56 per cent of gas usage, followed by ammonia (17 per cent) and methanol (14 per cent).
LNG production increased by 20 per cent to 51,753,948 mmbtu.
The minister will also be pleased that there was also an increase in crude production in July as several companies returned to normal after being negatively affected by Tropical Storm Bret.
Crude oil prices also increased in July as a result of strong refinery demand and signs of decreasing rate of drilling activity in the US.
West Texas Intermediate (WTI) and Brent prices increased by three per cent to US$46.53 per barrel and US$49.03 per barrel respectively.
It must be noted that both Perenco and bpTT’s crude which together represented one third of crude production averaged more than Brent prices at over US$51 a barrel in July.
The increased prices come as the US Energy Information Administration (EIA) forecasts that the crude oil market will be close to equilibrium in 2017, with world petroleum supply averaging 98.42 million b/d, and consumption expected to be 10,000 b/d lower at 98.41 million b/d. In 2018, world supply is projected at 100.21 million b/d and consumption at 100.02 million b/d.
On the commodities side, ammonia prices continue to trend lower due to production out of T&T, however, decrease in production in July of two per cent due mainly to reduced output from Tringen I as the plant experienced one day of downtime due to power loss.
Methanol production increased by 14 per cent due to a significant increase in output from M5000, as the plant returned to normal operations after experiencing downtime the previous month.
Urea production decreased while UAN production increased in July. There was also good news as refinery throughput increased by 33,951 bpd or 32 per cent in July to 139,027 bpd. Refinery unit cost, inclusive of overheads, decreased from US$7.32/bbl in June 2017 to US$5.42/bbl in July 2017 due to lower operating expenses combined with increased throughput.