Incorporated in 1975 as a wholly owned state energy company, the National Gas Company of Trinidad and Tobago Limited (NGC) has played a pivotal role in expanding the country’s gas-based energy sector. It has also catalyzed the social, economic and industrial development of the country through its investments, strategic partnerships and pioneering gas pricing model.
NGC owns, maintains and operates the country’s transmission and distribution gas pipeline network of approximately 1,000 kilometers, comprising both offshore and onshore segments and with the capacity to supply 4.4 billion standard cubic feet of gas per day. However, over the course of almost fifty years the company and its subsidiaries — today, the NGC Group of Companies — have evolved into a global business entity with an asset base of over $6 billion.
Its many successes notwithstanding, the NGC Group was not immune to the consequences of the COVID-19 pandemic. The entire global energy sector was hit hard in early 2020, with restrictions imposed by world governments seeing millions of people confined to their homes. As a result, energy demand plummeted and prices fell.
This led to NGC recording a loss of $2.1 billion for the financial year ending December 31, 2020. However, thanks to a rebound in prices, a series of strategic decisions and hard negotiation of contracts, the group made a strong recovery to record a profit of $2.6 billion by the end of the 2021 financial year and it was rated as Ba2 stable by Moody’s in 2022.
A strong recovery in 2021
Explaining how the group was able to successfully navigate its way through the difficulties of the pandemic, Mark Loquan, president, NGC, points to the institutional framework that was put in place throughout 2020 and 2021.
“During 2021 there was a resurgence of prices and unfreezing of industrial demand but we also signed some major contracts,” says Loquan. “We have a better foundation for the future and we are strengthening the institution with asset integrity and in many other areas.”
Expanding on the factors that led to profitability, Joseph Ishmael Khan, chairman, NGC, adds: “Right now the NGC Group of Companies is focused on value creation and building operational excellence in all aspects of the business. That is possible because we put a lot of emphasis on capacity building, institutional strengthening and a focus on human capital. If we didn’t focus on human capital, we couldn’t achieve a sustained competitive advantage in this operating space. And if we were not organized then 2021 may have had a different outcome, even though commodity prices were high.”
Part of the discussions that took place during the pandemic resulted in the development of a new strategic plan for the future. Initially looking ahead to 2025, there is now a clear focus on pivoting to sustainability and green energy. Within this, NGC has created a sustainable investing initiative to facilitate investments in clean energy — including the investment of $6 million of its international portfolio in BlackRock Global Funds’ Sustainable Energy Fund.
A greener, carbon-free future
NGC is also looking far beyond 2025, according to Vernon Paltoo, president of the National Energy Corporation of Trinidad and Tobago, a subsidiary of NGC that is mandated to conceptualize, promote, facilitate and develop sustainable energy-based industries. He says that, as one of the world’s largest ammonia and methanol exporters already, the nation has the infrastructure to be able to transition to a green hydrogen economy.
“While natural gas will continue to play a critical role, the country is moving toward building a decarbonized energy sector,” he states. “Trinidad and Tobago has always succeeded in staying one step ahead by understanding that the future is based on renewable energy. And because we already have such an established petrochemical industry, we have a market for hydrogen from methanol and ammonia. By having that market we are already ahead as we have the infrastructure in place — which gives us a unique advantage.”
In fact, Paltoo strongly believes that Trinidad and Tobago could even begin to export hydrogen. He adds: “We have set out a hydrogen roadmap and we estimate that the country’s offshore wind capacity is sufficient to produce 4 million tons of hydrogen per year.
“The country would need around 2 million to meet its own needs, which leaves us with an additional 2 million that we could export throughout the region. In the next 20 or 30 years, we could well become a hydrogen exporter, not just to the region, but to the rest of the world.”
Leading the way to regional opportunities
With Trinidad and Tobago home to one of the largest natural gas processing facilities in the Western Hemisphere — the NGC Group’s Phoenix Park Gas Processors complex — gas has been integral to the economic development and the energy security of the country for decades. And while the focus is now on transitioning to green energy, the NGC Group of Companies continues to assess ways in which it can provide the islands with greater and greener energy security. This area has taken on extra significance for the global group, having witnessed firsthand the impact the COVID-19 pandemic had on the energy industry throughout the world.
Khan is a strong believer that Trinidad and Tobago must work closely with other Caribbean countries to ensure a bright, secure energy future and the NGC Group of Companies is now leading the way when it comes to opportunities for green growth across the region.
It has even set up an online clean energy portal that provides information on available opportunities, financing and planning within the Caribbean, as well as detailing market and technology developments.
“If we work together we form a much stronger entity than on our own,” Khan says. “If we can forge a regional partnership in terms of energy security, we are less vulnerable when it comes to natural disasters, pandemics and conflict in other parts of the world.
“Partnership, knowledge transfer and technical assistance are a big part of how we share in this regional strategy for energy security, energy sustainability and the green transition.”