The Honourable Dr Keith Rowley, Prime Minister of the Republic of Trinidad and Tobago,
The Honourable Stuart Young, Minister of Energy and Energy Industries,
Ms Penelope Bradshaw-Niles, GECF Executive Board Member for Trinidad and Tobago,
Distinguished Delegates,
Ladies and Gentlemen,
All protocols observed
It is a distinct honour to address the Trinidad and Tobago Energy Conference. As we step into this New Year, I extend my best wishes to each and every one of you and to the people of Trinidad and Tobago, wishing peace and prosperity to this vibrant nation. I commend the wise leadership of The Honourable Dr Keith Rowley, Prime Minister, for hosting this energy conference at a special juncture for Trinidad and Tobago and for the energy industry at large. I would like to thank The Honourable Stuart Young, Minister of Energy and Energy Industries, for the gracious invitation to address such a distinguished gathering.
At the outset and on behalf of the Gas Exporting Countries Forum, I congratulate the Government and citizens of Trinidad and Tobago on two recent remarkable achievements. Firstly, commendations are due for the successful restructuring of the Atlantic LNG facility, after lengthy and complex negotiations. This restructuring and the implementation of market-based pricing ensure higher export revenues and fair value for the country.
Secondly, I applaud Trinidad and Tobago for signing energy cooperation agreements with the Bolivarian Republic of Venezuela, a fellow GECF member country, focusing on the development of the Dragon gas field. As I emphasized it in my speeches in Caracas last July and at the OLADE Ministerial Meeting in Montevideo in November, this agreement serves as a prime example of how infrastructure and resource sharing can enhance regional energy development for the collective benefit. It stands as a model for energy integration across Latin America. Trinidad and Tobago has been a pioneer in the oil and gas industry in the region since the early 20th century. Production of associated natural gas, and the discovery of natural gas fields, later paved the way for different downstream industries, such as methanol and ammonia production and export, and from 1999, for LNG, with the commissioning of Atlantic LNG, the second commercial plant in the Western Hemisphere. What is remarkable is that, in addition to the effective utilization of natural gas for socio-economic advancement, it has contributed to capacity building. I can see it every day reflected in the high level of expertise and competence of Trinidad and Tobago's representatives in the GECF. Their significant contributions in both governing bodies and as officers underscore the nation's valuable role and esteemed presence in the organization.
Ladies and Gentlemen, The global gas market is experiencing profound transformations, a result of successive shocks over the past four years. Initially, the coronavirus pandemic in 2020 significantly disrupted gas markets, leading to record low prices.
This was followed by the post-pandemic recovery in 2021, characterized by tight supplies and increasing demand and prices, as epitomised by TTF spot price exceeding 60$/MMbtu in the month of December.
The situation further escalated in 2022 due to a major geopolitical crisis, leading to record-high gas prices of more than 90$/MMbtu in August, particularly as Europe actively reduced its gas imports from Russia. Consequently, Europe transformed into a primary destination for LNG, a stark contrast from its previous role as a market of last resort.
In 2023, gas prices dropped significantly. TTF price averaged $13/MMbtu amidst a combination of warmer than normal winter, lower demand growth, and high storage levels in Europe. In 2024, global gas demand is projected to grow by 1.5% amidst the stabilization of gas prices, as well as accelerating coal-to-gas switching. However, this forecast could vary depending on weather conditions, particularly during the winter season. The Asia Pacific region is expected to be the primary driver of the demand surge.
Gas supply is forecasted to increase by 1.7%, but the growth in LNG capacity is rather limited. Relatively tight market conditions will continue prevailing until 2026, when a wave of new LNG capacities will come on stream.
In the long-term, the global energy system faces a constantly evolving array of challenges. Particularly pressing is the need to strike a balance between, on the one hand, the increasing global demand for energy, and on the second hand, the energy trilemma of ensuring energy security, affordability, and sustainability. Indeed, according to the GECF Global Gas Outlook, energy demand is forecasted to expand by 22% in the period to 2050, driven by increasing population (1.7 billion additional people by 2050), socio-economic development (doubling of global GDP in the upcoming three decades), and the pursuit of improved living standards.
Available, clean, flexible, and versatile, natural gas plays a key role in this intricate balancing act. It offers a sustainable substitute for traditional cooking and heating fuels like wood and dung, reducing indoor pollution and deforestation.
In power generation, the shift from coal to natural gas enhances urban air quality and curtails greenhouse gas emissions. As a complementary partner to renewables, natural gas provides backup and stability to power grids reliant on intermittent sources like solar and wind, or hydro during droughts. Additionally, its role as a key feedstock in fertilizer production supports food security and helps mitigate hunger
The GECF’s Global Gas Outlook projects a 36% increase in natural gas demand over the period to 2050, and its share in the global energy mix will rise from 23% in 2022 to 26% in 2050. Specifically, natural gas consumption in the Latin America and the Caribbean region will witness a twofold increase, reaching 320 billion cubic meters by 2050. While natural gas stands as the cleanest of hydrocarbons, it could be made even cleaner, through gas flaring and methane emissions reduction, along with large-scale deployment of Carbon Capture, Utilization, and Storage (CCUS) and the advancement of blue hydrogen utilisation in hard-to-abate sectors.
Ladies and gentlemen,
While energy security is back at the top of the priority list of policymakers, the issue of climate change remains at the forefront as epitomised by a record participation in COP28 in Dubai. The GECF had for the first time a pavilion in a COP, with a substantial advocacy programme that included daily panel discussions and presentations. I take this opportunity to express my appreciation to Ms Penelope Bradshaw-Niles for her kind participation in the Pavilion ministerial panel discussion. The outcome of the first global stocktake could be considered as positive for natural gas.
One, it is clear that the bottom-up approach underpinning the Paris Agreement is fully respected as well as the nationally determined character of Parties’ contributions to mitigation and adaptation.
Second, abandoning the wordings like “phasing-out or phasingdown of fossil fuels” in favour of “transitioning away from fossil fuels” is positive.
Third, the call to accelerate zero- and low-emission technologies, including abatement and removal technologies such as carbon capture and utilization and storage and low-carbon hydrogen production, opens bright perspectives for a rapid scale up of these technologies in the natural gas industry.
Four, the specific call to accelerate efforts towards the phase-down of unabated coal power paves the way for the acceleration of coalto-gas switching.
Finally, and this is important, in a separate article, article 29, the Parties recognize that “transitional fuels can play a role in facilitating the energy transition while ensuring energy security”. Clearly, it is about natural gas and it is a clear recognition of its role in facilitating just, orderly, and equitable energy transitions, while ensuring energy security, affordability and sustainability.
The COP28 outcome is a timely response to the misguided narrative that investing in natural gas projects is incompatible with combating climate change. Converting gas resources into reserves and reliable supply requires substantial investments and long lead times. Developing countries like Trinidad and Tobago bear little historical responsibility with regard climate change. They should not be penalised for using their natural resources to improve the quality of life of their people.
Ladies and gentlemen,
We are preparing for the 7th GECF Summit of Heads of State and Government, our biennial flagship event, set for the 2nd of March in Algeria. Trinidad and Tobago plays an active role in the preparation of its outcome, the Algiers Declaration. We hope its participation in the Summit will be commensurate to its importance in the Forum.
I wish you a successful conference.
Thank you for your attention.