AFTER recording a $316 million loss for the first half of 2020, the National Gas Company (NGC) is assuring that in the next 12 to 24 months, the company’s revenue streams will improve significantly.
“On the basis of what we’ve seen in 2020 and on the basis of what we’ve seen in 2021, we believe that in the very short term, the NGC will continue to get back its former state, where it will contribute positively to the Trinidad and Tobago revenue as we see it,” NGC chairman Conrad Enill said yesterday.
“What we are asking, at this point in time, is that simply all the players just hold on for a little bit longer as we go through this intervening period, which has gotten a little bit worse as a result of Covid and a number of other things taking place — the introduction of shale gas in the United States, the change in the structure. Suffice it to say, the NGC has a plan...,” he added.
Enill was addressing a Public Accounts (Enterprises) Committee meeting of Parliament yesterday. The committee examined the audited financial statements of the NGC for the years 2015 to 2018.
Enill noted that the company was putting strategies in place to ensure sustainability.
To help with the process, he said, the company will need the support of the Government in terms of putting legislation in place.
“The other thing we are looking at is an examination of what is taking place in every segment of the gas business and we are trying to ensure that the people of Trinidad and Tobago get the best possible benefit on what has been invested. And in order to do that, we are learning the business and we are making investments in the business for the long term…,” Enill said.
He said the Covid-19 pandemic tested the NGC’s ability to respond in a crisis.
“And during that particular period, all of our systems, our electricity and everything else, worked,” he emphasised.
Enill said had it not been for some issues that were not under NGC management’s control, the company would have made a profit in 2020.
“There are issues that are under the management’s control and there are issues that are not under the management’s control. The issue of subsidising the cost of gas to the people of Trinidad and Tobago and the issue of the non-payment by T&TEC are not under management’s control,” he stressed.
“So the fear that the organisation is somehow or the other not doing well is not true. The fact of the matter is that the organisation is doing well, but there are some issues that the organisation has inherited that it facilitated when the price was higher, and as a result of the reduction in price, we are seeing a different result,” Enill went on.
T&TEC’s $5.6 billion debt to NGC
NGC’s vice president of finance Narinejit Pariag told the PAEC meeting that the company’s business had been impacted by the decline in commodity prices, which had a knock-on effect on margins and the NGC’s ability to pay its operating and capital expenses over the last four to five years. He said the situation had been further exacerbated by the non-payment of money owed by Petrotrin and T&TEC.
Earlier in the session, PAEC chairman Wade Mark noted that Petrotrin owed the NGC $284 million at the time of its closure in 2018.
Pariag said at the end of 2020, T&TEC owed the NGC $5.6 billion, of which $3.7 billion represented a loan and $1.9 billion represented receivables for the years 2019 and 2020.
He said despite the outstanding sums owed, the NGC has done a great job at managing its cash balances.
“Beyond that as well, when you look at our dividend distributions over the last two to three years you will see a significant curtailment in dividend distributions to our shareholders. So our shareholders were adversely impacted by the cash flow situation and not getting the revenues from the NGC to support the Government’s fiscal agenda,” he added.
Going forward in 2021, Pariag said the NGC is working with the Ministries of Finance and Energy to address the non-payment by T&TEC as it is a “cash leakage that the business can’t sustain.”
“What we also plan to do in 2021 is that we will be going to the market to raise some financing to address some of our capital needs,” he added.