The Trinidad and Tobago government Monday says the outlook for the contribution of the energy sector to gross domestic product (GDP) “is not as buoyant” as 2022, as oil and gas prices are predicted to be average to moderate, due to the global economic slowdown, tight hydrocarbon markets and Organization of Petroleum Countries (OPEC) conservative production strategy.
Addressing the three-day 2023 Energy Conference organized by the Energy Chamber of Trinidad and Tobago, Prime Minister Dr. Keith Rowley said the country’s GDP is closely aligned with the performance of the energy sector.
He told the conference being held under the theme “Navigating a Complex Energy Future” that with the volatility in energy prices, the contribution of the sector to GDP fell from 46.8 percent in 2011 to 26.8 percent of GDP in 2021.
“The preliminary results for 2022 show an improved contribution of 33.7 percent of GDP due to the start-up of new major upstream projects and buoyant energy prices. However for 2023, the outlook is not as buoyant as oil and gas prices are predicted to be average to moderate, due to the global economic slowdown, tight hydrocarbon markets and OPEC’s conservative production strategy.”
Rowley said with the prediction for West Texas Intermediate, “our benchmark crude, will average US$77 per barrel in 2023 as compared to the 2022 average of US$95 per barrel. He said Henry Hub is predicted to average US$4.90 per MMbtu in 2023 as compared to the average price of US$7.42 per MMbtu in 2022.
Rowley said the consistently low Henry Hub price, over the years, is the reason the Trinidad and Tobago government has committed so much effort aimed at moving away from Henry Hub and the Spanish fuel prices in the marketing arrangements for gas processed for liquefied natural gas (LNG) in the restructured Atlantic LNG.
He told the conference at which Guyana’s President Dr. Irfaan Ali and the Caribbean Community (CARICOM) Secretary General, Dr. Carla Barnett, are due to address that another important subset of the domestic energy sector is the downstream industry which is dominated by petrochemicals, ammonia and methanol.
He said within recent years the industry has had to overcome severe economic conditions brought on by faltering demand, oversupply and of course the coronavirus (COVID-19) pandemic.
“The growth in global GDP occasioned by increased demand and robust petrochemical prices has helped the industry to weather the storm. This has enabled a resurgence in the domestic petrochemical industry.”
Rowley said these achievements have been as a result of the collaboration of the various stakeholders in managing a tight gas situation.
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