Ministry of Energy officials held a virtual meeting yesterday with high-level executives of BHP, the global commodities giant headquartered in Melbourne, Australia.
Government sources said yesterday the discussions, which were led on the T&T side by Energy Minister Stuart Young, focused on the future of the natural gas supply to Atlantic, the LNG production company based in Point Fortin, said the Government sources, who spoke on the condition of anonymity because of the sensitive and preliminary nature of the discussions.
The BHP officials wanted to discuss with the Government the prospects of its Calypso field, which is located in the deep waters off Tobago, which the company envisages will be used in both LNG and for domestic uses.
In an exclusive interview in the Sunday Express of May 9 to mark first oil from BHP’s Ruby project, the company’s new country manager, Michael Stone, signalled that the Calypso field had “orders of magnitude” more hydrocarbon resources than Ruby.
Stone also made clear that, even though it may take six or more years to monetise Calypso’s bounty of natural gas, the Australian company had already turned its attention to exploring its commercial prospects.
“We’ve discovered a tremendous amount of gas there. We’re going to be appraising that, and hopefully finding success to turn that into a commercial development,”
BHP is the operator of the Calypso field with a 70 per cent stake, but BP has a 30 per cent equity position in the development.
BP has been the major supplier of natural gas to the four-train LNG producer, Atlantic, along with Royal Dutch Shell.
The dominance of these two global energy giants in supplying natural gas for processing by Atlantic is reflected in their dominance in the shareholdings of the four trains. T&T’s National Gas Company is a minority shareholder in Trains I and IV, while China’s sovereign wealth fund, CIC, is also a shareholder.
In comparing the prospects of Ruby and Calypso, Stone said: “In the northern area, here we’re talking about Eastern Tobago, we have conducted a four-phase exploration drilling campaign that has yielded some significant discoveries. “We have announced that it is 3 to 3.5 trillion cubic feet of gas.
“By order of scale, you know the Ruby project is going to bring on additional gas resources of about 274 billion cubic feet. So relative to 274 billion, we’re talking about 3.5 trillion cubic feet. That is just what we’ve announced today because we have appraisal drilling to be done, and we hope that with successful drilling that number will grow.
“We’re talking about an orders of magnitude larger resource. That resource is so large, and it’s in deepwater, which as you can imagine is more expensive, the wells are deeper, the equipment needed is more complex and expensive to develop something of that size and scale. It’s going to take a lot of engineering work to figure out these deep wells, but also, it’s going to take a lot of commercial work as well.
“A resource of that scale, unlike Ruby, some significant portion of it needs to find its way into the international LNG market, which attracts international LNG prices in order to justify the scale of investment required to move it forward so. Having said all that, we’re very excited about it. It is a very significant resource and discovery. We’re hopeful that our appraisal programme that we’re about to undertake will be the next step in moving that significantly forward,” he said.
The appraisal is expected to be completed by the end of this month and the project could take several years to come together, said Stone.
“But if successful, and a lot of things have to come together to be sure, we hope if we’re successful and move this forward, that toward the latter end of the 2020s we’re able to bring on this huge new resource online,” he said.