Express Business Filler #1

The Central Bank reported yesterday that T&T’s energy sector experienced further setbacks in the second quarter, with natural gas production falling “primarily due to production curtailments at Atlantic LNG which is a major user of natural gas”.

In its November Monetary Policy Report (MPR), the Central Bank said LNG production from the Atlantic LNG facility at Point Fortin “declined primarily due to a maintenance shutdown and power outages at the Atlantic LNG facility in June 2019.”

According to the report: “The petrochemicals sub-sector experienced a boost in the production of ammonia and urea, largely representing a recovery from significant downtime in the comparable period the year before.”

It said that preliminary estimates for the first half of 2019 suggest that activity remained moderate in the non-energy sector.

“Activity declined in several crucial sub-sectors such as manufacturing and construction, while the distribution sub-sector was almost flat. There was, however, an improvement in activity in the finance sector over the review period,” the MPR stated.

The report said according to the Central Bank’s Quarterly Index of Real Economic Activity (QIEA), energy sector output was lower year-on-year by 3.4 per cent in the first six months of 2019.

“This was driven by the lower output of crude oil and liquefied natural gas (LNG) over the period. Additionally, non-energy sector activity fell marginally,” according to the MPR.

In a footnote, the Central Bank explained that the CSO is the official source of National Accounts (GDP) data in Trinidad and Tobago. It added the Central Bank compiles a Quarterly Index of Real Economic Activity (QIEA) to gauge short-term economic activity.

“The QIEA differs from the CSO’s national accounts statistics in terms of methodologies and coverage. The QIEA is based on production indicators, excludes price effects and does not comprehensively cover all sub-industries measured by the CSO,” the Central Bank explained.

Expanding on the output of energy products, the MPR stated: “For the first half of the year, total natural gas production declined by 0.7 per cent to 3,654 million standard cubic feet per day (mmscf/d).

“Crude oil output fell by 12.1 per cent to an average of 59,218 barrels of oil per day (bopd), largely reflecting inadequate investment in the industry over time, especially given the mature nature of the acreage.

“As crude oil production continued to decline, depth drilled also retreated by 22.6 per cent, which occurred alongside a fall of 16.6 per cent in rig days.

“Refining activity contracted by 17.7 per cent due to the closure of the Petrotrin refinery, and lower LNG production. LNG output declined by 1.3 per cent owing to scheduled maintenance at the production facilities, and a power outage in June 2019.”

On the other hand, real activity in the petrochemicals sub-sector grew by 6.2 per cent owing to an increase of 9.3 per cent in ammonia production and a 4.3 per cent rise in methanol production. Urea production declined marginally (0.5 per cent).

The report said a better-than-anticipated revenue outturn aided Government’s position resulting in a smaller fiscal deficit for FY 2018/19 and inflation remained contained during the first nine months of 2019.


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