As BP starts up the fifth of seven major projects in 2017 – and the second of the year in Trinidad and Tobago – regional president Norman Christie explains how new production will make a difference for the islands’ domestic energy supplies and why the Caribbean nation will be a key player in fulfilling BP’s shift towards gas.
That strategy has been built on a foundation with two objectives: to prioritize safety and asset management, while at the same time improving production and margins for the business. What is really exciting about 2017 is the clear demonstration that the strategy is working. In production terms, we have completed three significant project start-ups, with Juniper as the largest. Back in April, we had the start up of the Trinidad Onshore Compression project (known as TROC) which increases production from some of our existing field by lowering system pressures. Soon after that, we also saw the completion of a new field development, Sercan 2, that is operated by our joint venture partner EOG. And, of course, now Juniper is onstream.
Together, these three projects will add around one billion cubic feet of gas per day to our production capacity. That’s not all incremental production over time because we are offsetting some natural field decline elsewhere in our region. However, the increased capacity will alleviate some gas shortfall challenges we have here in the country, as well as support the BP group-wide strategy to produce more gas.
Trinidad and Tobago have seen a gas shortfall since about 2011. There has not been enough gas to meet the islands’ needs for both liquefied natural gas production and to feed the petrochemical plants. Our new TROC and Juniper projects start to reverse the situation – they won’t completely eliminate the shortfalls but significantly mitigate them. For TROC, we expect incremental production of 200 million cubic feet a day and for Juniper around 590 million. Combined with the volumes from our joint venture, they give a big boost to the country’s energy supply.
Our regional strategy is lined up with BP’s as a whole and our area development plan looks to the long-term future here in the Caribbean. We continue our exploration work as well; we completed a seismic program earlier this year and we also completed drilling on two exploration wells. In June, we were pleased to announce that BPTT had made two significant gas discoveries with the Savannah and Macadamia exploration wells, offshore Trinidad. The results of these wells have unlocked approximately 2 trillion cubic feet (tcf) of gas in place to underpin new developments in these areas.
Years of effort and negotiation have also come to fruition this year with the completion of a new sales agreement with the National Gas Company (NGC), updating one that has been in existence for 20 years. On the margins side, this new agreement recognizes the need to incentivize the Upstream – with some different pricing structures – while making sure that the rest of the gas value chain still works. There is some more flexibility now about how much gas will go for export, depending on prices and markets, but in future, as a rule of thumb, the split between domestic and export will be around half and half.
The new gas sales agreement provides the platform, so to speak, for future developments, exploration activities and infrastructure investments. First among those developments is Angelin [see box] – which we sanctioned in late May. We’re already underway with major infrastructure projects – we’re refurbishing the Galeota terminal where all our liquids from offshore arrive for processing. The terminal is more than 40-years-old and this expansion project will add at least another 20 years to its life. We’ve also just completed an accommodation project for our offshore Mahogany hub – gas from the Juniper platform flows through here. Those improvements focused on safety and the welfare of our staff and other workers.
The positive side of our local fabrication story is that the topsides for the Juniper platform were the latest in a string of infrastructure to be made here in Trinidad. Before Juniper, five complete unmanned platforms were built in La Brea, on the southwestern edge of the island, including Mango, Savonette and Serrette.
As a result of some schedule pressure and some productivity losses, we’ve taken the decision to construct upcoming Angelin out of the country. We’re going to work to address the issues and then bring fabrication back here in a way that is beneficial to both the country and the business. The aspiration for our work here is that it should benefit every citizen of the nation – it’s a lofty goal but the purpose is a big deal for us. BP has the majority of the upstream infrastructure here, significant acreage and great expertise in its people, so it is incumbent upon us to take that position of privilege and remind ourselves why we are here. Doing well for the business as a multi-national and also for the country are not mutually exclusive principles. We can do both and do it well.
What’s next?
The next major project for BP in Trinidad is the development of the Angelin natural gas field. It is located in water depths of 65 meters, around 60 kilometers off the east coast of Trinidad.
The Angelin development will include four wells and will have a production capacity of approximately 600 million standard cubic feet of gas a day (mmscfd).
Gas from Angelin will flow to the Serrette platform hub via a new 21 kilometer pipeline. Drilling is due to commence in Q3 2018 and first gas from the facility is expected in 1Q 2019.
