Optimizing the Natural Gas Value Chain

Developing Energy Based Manufacturing Industries Vernon Paltoo
Team Leader – Office of the President National Energy Corporation
CARIBBEAN INVESTMENT FORUM

Trinidad Hilton
June 2011

Presentation Outline
 The Case for Energy Based Manufacturing Projects  Options for Energy Based Manufacturing Projects  The Way Forward

2

The Case for Energy Based Manufacturing Projects .

Overview of Energy Industry Trinidad & Tobago Global Leader in Export of Methanol Export of Ammonia Export of LNG to USA • Leading Methanol Exporter in the World • Leading Ammonia Exporter in the World • Leading Exporter of LNG to North America .

capacity for methanol and ammonia may have to be gradually reduced in this country.  US domestic gas prices are becoming competitive with gas from Trinidad and Tobago.Issues Affecting Future Development of Primary Chemical and Gas Based Industries  Expansion in additional methanol and ammonia capacity could adversely affect our position as a key player by further saturating the market.  Creation of a sustainable and diversified energy industry is critical to the future state of the economy. 5 .  Development of the Shale Gas Industry in the US would adversely impact our LNG Markets in North America.  As other lower cost locations become established.

Progress of Energy Sector Gas-based Development Integrated Petrochemical Complex 2010 Petrochemicals & Metals 1970s/80s LNG 1990s Integrated Energy-based Manufacturing Industries 2010 & Beyond Gas Production 1960s/70s .

Benefits of Developing Smaller Energy Based Manufacturing Projects Larger number of permanent and construction jobs per unit of capex Build technical and intellectual resources Impetus and stimulation for high level and specialized manufacturing industries Enhanced and broader R&D potential Leveraging the strengths of the energy sector to develop manufacturing industries Allows for development of additional and more integrated energy service industries Minimal impact on levels of reserves Allows for development of a sustainable and diversified energy industry .

Advantages of Smaller Chemical and Manufacturing Industries Natural gas used as a fuel as opposed to a raw material Minimal infrastructure requirements Relatively small capital expense Modest utility requirements Minimal land requirements Less complex to establish than chemical industries .

Options for Energy Based Manufacturing Projects .

Rubber & Fibres 14% Bulk Petrochemicals & Organics 17% Consumer Products 12% Agri. 5% Pharmaceuticals 26% Industrial Gases 2% Inorganics 4% Source: CMAI/ACC 10 . Chem.Global Chemical Products Business Value of Current Global Chemical Production: > US$2 Trillion Specialty Chemicals 14% Coatings 5% Adhesives and Sealants 1% Polymers. Syn.

Methane Processing Formaldehyde & UF Resin Acetic Acid PP/PE Methanol Natural Gas /Methane MTP/MTO Chemicals Exp/Man Exp/Man Exp/Man Exp/Man Urea Melamine Exp/Man Ammonia Nitric Acid Ammonium Nitrate UAN 11 .

Melamine-based Manufacturing Business Opportunities  Melamine Moulding Compounds  Dinnerware  Adhesives  Coatings  Laminates  Plasticizers .

Manufacturing Industries from Melamine 13 .

Conceptual Estate Plan for Downstream Melamine Industries 14 .

Material Coatings Paints Packaging Polyester/PET Bottles Containers Film Insulation Fabric Clothing Textiles 15 .Using Acetic Acid for Backward Integration of Chemical and Manufacturing Industries in Trinidad and Tobago Carbon Monoxide Acetic Acid Xylene Ethylene Purified Teraphthalic Acid (PTA) Ethylene Glycol Acetic Anhydride Vinyl Acetate Monomer (VAM) Salicylic Acid Acetylsalicylic Acid (Aspirin) PVA Textiles Adhesives Bldg. Material Coatings Paints EVA/VAE Textiles Adhesives Bldg.

NaOH.Derivative Chemicals and Manufacturing Products from Ethylene Benzene. Sulphur Trioxide Ethylene Hydrochloric Acid Acetic Acid Vinyl Acetate Monomer Textiles Clothing Paints Resins Packaging Car Parts Safety Glass Oxygen Linear Alkyl Benzene Sulphonate Surfactants Detergents Cleaning Agents Ethylene Glycol Polyvinyl Chloride Pipes Insulation Furniture Fittings Packaging Doors Windows 16 Polyester Fibers Clothing Car Seats Polyester Films Packaging Antifreeze .

Syn. Oxygen Water Glycerol Propylene Glycol Propylene Oxide Acrylonitriles Food Applications Pharmaceuticals Antifreeze Solvent Detergents Explosives Food Applications Pharmaceuticals Antifreeze Solvent Paints Resins Coatings Polyurethane Fumigant Biological Apps. Fibers Clothing Carpets Rubbers Packaging Elastomers 17 .Derivative Chemicals and Manufacturing Products from Propylene Chlorine Propylene Hydrogen Peroxide Ammonia.

Manufacturing Industries from Polyethylene and Polypropylene Polyethylene  Containers  Pipes  Appliance Parts  Bottle Crates  Film Sheeting  Bags  Bowls Polypropylene  Carpeting  Brushes  Carpet Backing  Rope  Tape  Film Sheeting  Containers  Appliance Parts  Bottles & Caps  Cups  Toys 18 .

Butane Processing ISO-BUTANE REFINERY APPLICIATION FOOD PRODUCTS Natural Gas BUTANE UNSATURATED POLYESTER RESIN N-BUTANE MALEIC ANHYDRIDE OIL ADDITIVES SPECIALITY CHEMICALS 19 .

etc.  Water Treatment Chemicals  Detergents  Pesticides  Agricultural chemicals 20 . automotive parts.Manufacturing Products from Maleic Anhydride  Unsaturated Polyester Resins – used in fibre glass. etc.  Foods and Pharmaceuticals  Personal Care products – hair spray. etc. adhesives. building panels.  Domestic Products – floor polish.

The Way Forward .

Engaging Local and Foreign Investors  Establish target projects via market assessments and resource requirements for particular projects  Engage in direct contact with established manufacturers  Engage local petrochemical and chemical industries  Participate in local and foreign networking events  Engage local entrepreneurs and financiers .

Seek Partnerships        Mutually beneficial arrangement Technical Capabilities and Experience Knowledge Transfer Sound Financial Position Availability of Resources Market Access Integration of Value-chain 23 .

Investment in Trinidad and Tobago Strategic location for market access Consistent and transparent Governance Known and accepted tax regime Known and accepted legal system Well-trained and knowledgeable labour force  Competitive cost structure for raw materials and construction  Quick decision making process      24 .

 Trinidad and Tobago is well positioned for the development of integrated manufacturing based energy projects for production from the primary energy product to the finished manufactured goods.Conclusion  Developing smaller and diversified downstream chemical based and manufacturing industries is integral for optimizing natural gas resources along the entire value chain. 25 .

Thank You 26 .

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