A 'mammoth project' with India?
By David Renwick
Trinidad Express
Jan 31, 2012
It may not be generally recognised but the upgrader project that Energy and Energy Affairs Minister Kevin Christian Ramnarine pursued with Reliance Industries during the Trinidad and Tobago delegation's visit to India last month, led by Prime Minister Kamla Persad-Bissessar, has enormous game-changing (sorry to use a now popular cliché) implications for this country's energy sector.
Why? Because if it eventually goes ahead, it will make a decisive contribution to arresting what seems to be the inexorable decline in the country's crude oil production, Ramnarine's most pressing objective.
There seem to be different versions of what the project actually involves but the crux of the initiative is converting forms of both refined and not-yet-refined oil into products that can make a significant contribution to increasing the country's oil output.
According to Andrew McIntosh, who has only 29 days to go as president of the State-owned National Gas Company (NGC), "52,000 b/d of the Petrotrin refinery's output is still fuel oil and that is losing money. The process we are going after will take the fuel oil from Petrotrin and hydrogenate it. You build a hydrogen plant, to which NGC will supply the gas and you heat it up and come up with higher valued products."
Mr McIntosh, who spoke to me exclusively, claims paternity for the upgrader initiative.
"I came up with this when I was at Petrotrin many years ago," he recalls. "During the first upgrade at Pointe-a-Pierre refinery, we decreased the bottom of the barrel (fuel oil) to 37 per cent but we always wanted to crack it further. But in those days, de-coking was the way and Petrotrin didn't have the money. Many years later, I came across a very good technology developed by Kellog, Brown and Root (KBR) that could upgrade fuel oil on a 95 per cent conversion basis. Through KBR, we got in touch with Reliance and we have been discussing the project in terms of Reliance bringing pulverised bitumen from Colombia, mixing it with the fuel oil bottoms from Petrotrin and upgrading that to Arab Light medium, which is around 27 degrees API."
Of course, the "bottom of the barrel" at the Petrotrin refinery also includes bitumen itself of which 249,861 barrels were produced in 2010, so that will, presumably, also be thrown into the mix.
McIntosh also mentioned that heavy oil in Trinidad and Tobago (API gravity of 18 degrees or less) would probably be brought into play as well and it is interesting to note that Minister Ramnarine on his return from the India tours, in which the NGC president also participated, did not mention fuel oil at all, confining his remarks about the upgrader only to heavy oil, which he described as a "tremendous resource that has been largely under-utilised over the last 100 years".
Petrotrin is now due to provide data to Reliance – which, by the way, is India's largest private sector firm and has extensive interests in energy – about its heavy oil resources in the Gulf of Paria and on land.
But that is not all there could be to this investment, since McIntosh has also mentioned Trinidad's tar sands, which are another neglected resource that has been with us since time immemorial. The bitumen in the tar sands, also known as oil sands, located in the southern basin of Trinidad, can be squeezed out and put through various stages to make it acceptable to a refinery.
So what we have here, if all the elements I have described above are included, is what the NGC president rightly describes as a "mammoth project".
It could achieve the following:
1. Produce lighter products out of fuel oil, thus considerably improving the returns to Trinidad and Tobago from refinery sales (not for the Petrotrin refinery per se but for the country, since new plants would be required for the job).
2. Monetise the heavy oil, which has hitherto figured only to a very minimal extent in crude production, thus increasing the country's oil output.
3. Monetise the tar sands, which will also add to crude production.
If Minister Ramnarine is really hoping to salvage the crude production situation during his tenure, this is certainly one of the more revolutionary ways of doing so.
There are other ways too, such as the discovery of brand new oilfields or the determined application of enhanced oil recovery (EOR) methods to the oil currently stranded in years-old reservoirs.
But what's exciting about the heavy oil and tar sands components of the Reliance project is that they go after new sources of crude entirely and ones which have virtually unlimited potential to boot.
The tar sands one, if it is eventually taken into the mix, is of particular interest to me, since I have been writing about that subject in various fora for some time.
I strongly suggest that Minister Ramnarine get in touch with Herbert Sukhu, the most passionate advocate of tar sands development in Trinidad and Tobago.
Mr Sukhu, a mining geologist and petroleum engineer by training, runs a consulting company, Geominex Resources Ltd, and practises his craft between Trinidad and Tobago and Canada, where tar sands extraction is now very big business.
He has just established an Institute of Energy and Mining, specifically to ready the industry for tar sands development when it comes.
He is convinced that Trinidad tar sands can eventually yield as much as 30,000 b/d of extra crude production and, though it is more expensive to recover than the country's traditional medium to light oil, is eminently commercial at the current oil price of around US$100 a barrel.
Suhku tells me that his Institute will "cater for the specific needs of what, in effect, will be an entirely new part of the local oil industry".
The main need is the most fundamental – knowledge about tar sands on the part of geologists and petroleum engineers.
"How many of the geologists coming out of UWI's geoscience programme have been trained in tar sands?" he asks and answers his own question: "None."
Sukhu is convinced that if Reliance's "massive project" is to be of overall benefit to Trinidad and Tobago, that situation must change as soon as possible.
David Renwick was awarded the Hummingbird Medal (Gold) in 2008 for the development of energy journalism in Trinidad and Tobago.
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