Caribbean Energy Information System (CEIS)

January 2012

The development of the Natural Gas

Industry for years has been linked to

oil prices and the demand for oil

particularly in the more developed

countries. However, the commodity

has not been a globally traded one

mainly due to the fact that the product

was primarily moved by pipelines

hence creating fairly distinct prices and

regional markets across the globe.

With the development

of Liquified Natural

Gas (LNG) in 1964, the

framework has been

dramatically altered as

the product can now be transported

across the globe without the need for

pipeline infrastructure. LNG takes up

much less space, approximately

1/600th the volume of the same

amount of gaseous natural gas. This

allows it to be shipped much more

efficiently via ocean tankers

thereby creating options out-

side of Crude Oil as a primary

petroleum import. The question

brought to mind in recent times is

whether LNG is the future for the pe-

troleum industry?

Trinidad and Tobago has been the

Caribbean’s top producer of Natural

Gas and has developed the industry to

the point where approximately 70% of

the United States demand for LNG has

been met by T&T. LNG from Trinidad

and Tobago has also been transported

to other parts of the world and the

product is also dispatched across the

globe through re-gasification facilities

in other countries such as Canada,

Chile, the Dominican Republic, and

Argentina. In the Dominican Republic,

the use of LNG has been rapidly in-

creasing where the product now forms

approximately one third of the coun-

tries energy matrix with increasing use

in the transportation sector.

The success of the natural gas industry

in Trinidad & Tobago has led to a

boom in the demand for LNG world-

wide. In many other countries across

the globe, the product is increasingly

being used with particular focus on the

electricity and transport sectors. This

increased demand is also partly due to

CARIBBEAN PETROLEUM UPDATE is a monthly Bulletin which highlights petroleum issues affecting or relevant to the

Caribbean, international developments that may affect the region’s way of life and movements in oil prices and retail prices for fuel regionally.

To access CEIS website

CONTACT US

Caribbean Energy Information System

Scientific Research Council

Hope Gardens, Kingston 6, Jamaica

1-876-927-1779 (Telephone)

1-876-977-1840 (Fax)

ceis@src-jamaica.org

www.ceis-caribenergy.org

LNG Being Loaded Onto a Tanker Source: Center for Liquefied Natural Gas

continued on page 2/

page 2 Call: 1-876-927-1779 | Caribbean Petroleum Update : January 2012

C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )

price volatility and supply issues associated with oil and

the obvious need to reduce our dependency on the so

called “Black Gold.” Apart from T&T, Barbados, Domini-

can Republic and Cuba, the other Caribbean countries do

not have the necessary facilities or infrastructure to utilize

LNG resulting in total dependence on imported oil. The

price for oil in comparison to LNG is significantly differ-

ent. The price for Natural gas sells for roughly 4 dollars

per million BTU in the U.S. but as high as 16 dollars in

Japan and Asia. The low LNG prices are mainly a function

of oversupply of gas internationally both due to increased

LNG supply, with significant new capacity coming on

stream globally, and low global demand due to inadequate

infrastructure in some countries to accommodate the

product.

If all Caribbean countries had unrestricted access to LNG

significant economic gains could be achieved. Many

Caribbean nations such as Jamaica that depend heavily on

Crude Oil imports would welcome the idea of LNG

imports. However, many factors have restricted significant

progress in this area. One such factor relates to the

non existence of the local infrastructures such as a

re-gasification plant and pipelines to convert LNG to its

gaseous state and to transport the LNG for use.

Like Jamaica, many other Caribbean countries are desir-

ous of using the product to fuel the electricity sector. How-

ever, most of the existing generating plants are not

equipped to use the product and as such a complete mod-

ernization of these electricity generating facilities would

be required. To do so would require great capital invest-

ments on the part of investors which many are reluctant to

take on not having any guaranteed LNG supply arrange-

ments in place. The modernization or building of generat-

ing facilities to accommodate the use of LNG as the pri-

mary generating fuel would also take years as this would

not happen at the snap of a finger. The necessary legisla-

tions and framework would also have to be in place to ad-

dress issues regarding storage, use and transportation of

the product inland

The availability and supply of LNG from Trinidad at

agreed or affordable prices is another factor. Inadequate

supply at any one time can lead to price increases, which

Is Shale Gas/LNG the Future for the Caribbean Petroleum Industry?.................continued from page 1/

continued on page 3/

signal to production companies the need to increase the sup-

ply of natural gas to the market. Trinidad over the years has

increased production to satisfy demand contracts with the

United States. However, the pace at which T&T has sought

to develop supply contracts with its regional neighbours has

been slow as the necessary infrastructure and consensus on

pricing have not materialized. This situation may very well

be dispelled in the near future with the United States an-

nouncing increased production of Shale gas and their possi-

bility of becoming a net exporter by sometime in 2012. This

could impact and reconfigure the regional energy market of

which price is an important corollary. A new era and restruc-

turing of where and how present and prospective natural gas

importing nations of the world source their supplies could be

at hand. The diversification of the Caribbean nations energy

mix may possibly be closer with U.S. possible intervention

into the Caribbean market. Despite this new development,

Trinidad & Tobago LNG experts are confident that the na-

ture of their gas contracts remains sound. However, that

said, the question at hand is whether Trinidad & Tobago is

in a state of denial or fooling themselves? Supply and de-

mand are interlinked and both drive prices, If U.S. is able to

satisfy its local demand for LNG, exports from Trinidad &

Tobago may no longer be required in such large quantities

thereby forcing the twin island to find new markets. Addi-

tionally the U.S. may look at tapping into the Trinidad’s ex-

port market and possibly there might be some level of price

convergence. Oil may no longer be the primary petroleum

product if plans by nations having Natural Gas or Shale Gas

resources are expedited. It would be “a dream come”

through for many Caribbean nations if they too, could boast

a less than US$0.10/Kwh for electricity from Natural Gas.

Bearing in mind that demand and supply determine prices,

there is a strong likelihood that if the necessary steps are

taken to put the necessary infrastructures in place to accom-

modate the use of LNG then this product could become the

primary fuel of choice for Caribbean nations and the World

at large.

Caribbean Petroleum Update : January 2012 | Call: 1-876-927-1779 page 3

C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )

Below is a Map of the World Shale Gas Resources.

continued on page 4/

Is Shale Gas/LNG the Future for the Caribbean Petroleum Industry?.................continued from page 2/

ADVANTAGES OF LNG

LNG has very low particulate emissions because of its low

carbon to hydrogen ratio.

There are negligible evaporative emissions, requiring no rele-

vant control.

Due to its low carbon-to-hydrogen ratio, it produces less car-

bon dioxide per GJ of fuel than diesel.

It has low cold-start emissions due to its gaseous state.

It has extended flammability limits, allowing stable combus-

tion at leaner mixtures.

It has a lower adiabatic flame temperature than diesel, leading

to lower Sulphur emissions.

It has a much higher ignition temperature than diesel, making

it more difficult to auto-ignite, thus safer.

It contains non-toxic components.

When released to the atmosphere and evaporated it is much

lighter than air and thus it is safer than spilled diesel.

Methane is not a volatile organic compound (VOC).

Engines fuelled with natural gas in heavy-duty vehicles offer

more quiet operation than equivalent diesel engines, making

them more attractive for use in urban areas.

It has nearly zero sulfur levels and, thus, negligible sulfate

emissions.

LNG has little to no chance of igniting or exploding should a

spill occur.

page 4 Call: 1-876-927-1779 | Caribbean Petroleum Update : January 2012

C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )

Rank Country

Proved Natural Gas

Reserves

(million cubic

meters)

Per capita

(thousand cubic

meters)

per square km

(thousand cubic

meters) Date Rank Country

Proved Natural

Gas Reserves

(million cubic

meters)

Per capita

(thousand

cubic meters)

per square km

(thousand cubic

meters) Date

1 Russia 47,570,000 339.69 2,904.60 January 2009 est. 51 Philippines 98,540 1.01 330.5 January 2009 est.

2 Iran 29,610,000 441.69 19,332.80 January 2010 est. 52 Chile 97,970 5.9 131.7 January 2009 est.

3 Qatar 25,260,000 30,313.76 2,180,217.50 January 2009 est. 53 Italy 94,150 1.62 320.1 January 2009 est.

4 Turkmenistan 7,940,000 1,625.42 16,896.10 January 2009 est. 54 Bahrain 92,030 126.45 124,197.00 January 2009 est.

5 Saudi Arabia 7,319,000 255.14 3,404.70 January 2009 est. 55 Congo (Republic) 90,610 22.58 265.3 January 2009 est.

6 United States of America 6,731,000 21.91 734.7 January 2009 est. 56 Sudan 84,950 2.07 35.8 January 2009 est.

7 United Arab Emirates 6,071,000 1,265.19 72,619.60 January 2009 est. 57 Cuba 70,790 6.18 644.6 January 2009 est.

8 Nigeria 5,215,000 34.95 5,725.90 January 2009 est. 58 Tunisia 65,130 6.21 419.2 January 2009 est.

9 Venezuela 4,840,000 180.5 5,487.20 January 2009 est. 59 Romania 63,000 2.84 274 January 2009 est.

10 Algeria 4,502,000 131.72 1,890.20 January 2009 est. 60 Namibia 62,290 29.54 75.7 January 2009 est.

11 Iraq 3,170,000 109.52 7,247.90 January 2009 est. 61 Denmark 61,300 11.14 1,444.60 January 2009 est.

12 Indonesia 3,001,000 12.49 1,656.60 January 2009 est. 62 Rwanda 56,630 5.41 2,295.70 January 2009 est.

13 Kazakhstan 2,407,000 156.3 891.6 January 2009 est. 63 Korea (South) 50,000 1.02 515.9 January 2008 est.

14 Malaysia 2,350,000 91.38 7,150.30 January 2009 est. 64 Afghanistan 49,550 1.74 76 January 2009 est.

15 Norway 2,313,000 496.29 7,601.50 January 2009 est. 65 Serbia 48,140 6.52 621.4 January 2009 est.

16 China 2,265,000 1.69 236.7 January 2009 est. 66 Equatorial Guinea 36,810 58.11 1,312.30 January 2009 est.

17 Uzbekistan 1,841,000 66.69 4,327.70 January 2009 est. 67 New Zealand 33,980 8.06 126.9 January 2009 est.

18 Kuwait 1,794,000 666.63 100,684.70 January 2009 est. 68 Croatia 30,580 6.81 546.3 January 2009 est.

19 Egypt 1,656,000 19.93 1,663.60 January 2009 est. 69 Israel 30,440 4.21 1,406.50 January 2009 est.

20 Canada 1,640,000 48.97 180.3 January 2009 est. 70 Cote d'Ivoire 28,320 1.37 89.1 January 2009 est.

21 Libya 1,540,000 244.04 875.2 January 2009 est. 70 Gabon 28,320 18.69 109.9 January 2009 est.

22 Netherlands 1,416,000 84.71 41,778.50 January 2009 est. 70 Mauritania 28,320 9.05 27.5 January 2009 est.

23 Ukraine 1,104,000 24.16 1,905.60 January 2009 est. 73 Ethiopia 24,920 0.29 24.9 January 2009 est.

24 India 1,075,000 0.92 361.6 January 2009 est. 74 Ghana 22,650 0.95 99.5 January 2009 est.

25 Pakistan 885,300 5.02 1,148.40 January 2009 est. 75 Japan 20,900 0.16 57.3 January 2009 est.

26 Australia 849,500 39.95 110.6 January 2009 est. 76 Austria 16,140 1.97 195.8 January 2009 est.

26 Azerbaijan 849,500 103.11 10,280.90 January 2009 est. 77 Slovakia 14,160 2.59 294.4 January 2009 est.

26 Oman 849,500 248.53 2,744.70 January 2009 est. 78 Ireland 9,911 2.36 143.9 January 2009 est.

29 Bolivia 750,400 76.77 692.7 January 2009 est. 79 Ecuador 8,919 0.61 32.2 January 2009 est.

30 Vietnam 610,000 7.01 1,967.30 January 2009 est. 80 Georgia 8,495 1.84 121.9 January 2009 est.

31 Trinidad & Tobago 531,500 432.13 103,646.60 January 2009 est. 80 Turkey 8,495 0.11 11 January 2009 est.

32 Yemen 478,500 20.09 906.3 January 2009 est. 82 Hungary 8,098 0.82 90.4 January 2009 est.

33 Argentina 441,700 10.8 161.4 January 2009 est. 83 France 6,937 0.11 12.6 January 2009 est.

34 Brunei 390,800 1,006.72 74,226.00 January 2009 est. 84 Tanzania 6,513 0.16 7.4 January 2009 est.

35 Mexico 372,700 3.35 191.7 January 2009 est. 85 Taiwan (Rep. of China) 6,229 0.27 193.1 January 2009 est.

36 Brazil 365,000 1.84 43.1 January 2009 est. 86 Jordan 6,031 0.95 67.9 January 2009 est.

37 Great Britain & Northern Ireland 342,900 5.61 1,417.40 January 2009 est. 87 Bulgaria 5,663 0.79 52.2 January 2009 est.

38 Peru 335,300 11.35 262 January 2009 est. 87 Kyrgyzstan 5,663 1.04 29.5 January 2009 est.

39 Thailand 317,100 4.81 620.7 January 2009 est. 87 Somalia 5,663 0.58 9 January 2009 est.

40 Myanmar 283,200 5.88 433.4 January 2009 est. 87 Tajikistan 5,663 0.77 40 January 2009 est.

41 Angola 269,800 21.08 216.4 January 2009 est. 91 Czech Republic 3,964 0.39 51.3 January 2009 est.

42 Syria 240,700 11.93 1,310.80 January 2009 est. 92 Guatemala 2,960 0.24 27.6 January 2006 est.

43 Papua New Guinea 226,500 37.39 500.2 January 2009 est. 93 Belarus 2,832 0.29 14 January 2009 est.

44 East Timor 200,000 188.19 13,446.30 January 2006 est. 94 Spain 2,548 0.06 5.1 January 2009 est.

45 Germany 175,600 2.13 503.6 January 2009 est. 95 Greece 1,982 0.18 15.2 January 2009 est.

46 Poland 164,800 4.28 541.7 January 2009 est. 96 Morocco 1,501 0.04 3.4 January 2009 est.

47 Bangladesh 141,600 0.91 1,087.80 January 2009 est. 97 Benin 1,133 0.13 10.2 January 2009 est.

48 Cameroon 135,100 7.16 285.8 January 2009 est. 98 Congo (Dem. Rep.) 991 0.01 0.4 January 2009 est.

49 Mozambique 127,400 5.88 162 January 2009 est. 99 Albania 850 0.23 31 January 2009 est.

50 Colombia 105,900 2.32 95.5 January 2009 est. 100 Barbados 142 0.5 329.3 January 2009 est.

101 South Africa 27 0 0 January 2006 est.

For non-listed countries is no information available.

1 cubic meter corresponds to 1.308 cubic yards.

Source: CIA World Factbook (2010-08-04)

Proved Natural Gas Reserves of the WorldTable 1

Is Shale Gas/LNG the Future for the Caribbean Petroleum Industry?.................continued from page 3/

ADVANTAGES OF LNG (cont’d)

When LNG is vaporized into its gaseous form, the fuel will

only burn when mixed with air in concentrations of 5 and

15%.

LNG and the vapors associated with it do not explode in an

open environment making the product safer than any other

Petroleum fuel.

Compared with other fossil fuels, Natural gas is relatively

clean with regards to air pollution and greenhouse gas emis-

sions and has larger proven reserves than Crude Oil.

Liquefaction makes it possible to market important gas re-

serves located in remote areas, far away from consumer

countries, as it reduces the volume: 1litre of liquefied natural

gas (LNG) corresponds roughly to 600 litres of natural gas.

Caribbean Petroleum Update : January 2012 | Call: 1-876-927-1779 page 5

C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )

CC A R I BA R I B PP E T R O L E U ME T R O L E U M NN E W SE W S & H& H A P P E N I N G SA P P E N I N G S

CUBA

Oil rig already in Cuban waters after US

inspection >> 20/01/2012

Fidel Castro warns again about nuclear war and climate

change >> 09/01/2012

Cuba boosts use of sugarcane biomass to generate

electricity >> 22/12/2011

Cuba and Venezuela sign $1.6 billion in cooperation

accords >> 21/12/2011

HAITI

Haiti leader launches power programme >> 24/01/2012

GUYANA

Guyana has a great deal of promise in oil and gas, says

energy executive >> 28/01/2012

Guyana continues hunt for offshore oil >> 26/01/2012

JAMAICA

Private equity firm, Blue Equity LLC, on Tuesday ac-

quired control of Cool Petroleum Holdings Limited

which operates the Shell gas station and oil

distributorship in Jamaica. >> 11/01/2012

MONSTERRAT

Shortage of aviation fuel expected to affect air travel to

Montserrat >> 20/12/2011

VENEZUELA

Petrobras' CEO participates in Global Pact meeting at

UN Headquarters >> 16/12/2011

Venezuela Increasing Influence in Region Through

Petrocaribe >> 13/12/2011

Venezuelan government "prepared to amicable arrange-

ment" with Exxon >> 06/12/2011

Petrocaribe to boost Caribbean refining

storage >> 06/12/2011

Venezuela Confirms Buys Jets From Brazil’s

Embraer >> 03/12/2011

Venezuelan oil exports to the US down to 1992

levels >> 01/12/2011

INTERNATIONAL

UN watchdog group visits Iran as conflict over oil em-

bargo continues >>30/01/2012

No energy industry backing for the 'F word' >>

29/01/2012

Iran nuclear scientist killed in car bomb attack >>

12/01/2012

Iran tests cruise missiles over Strait of Hormuz

(Threatens closure of strait, passageway for one-sixth the

world's oil supply) >>03/01/2012

Oil price soars on promising economic news >>

21/12/2011

Drilling in the caribbean sea courtesy embassy of

Colombia Washington

page 6 Call: 1-876-927-1779 | Caribbean Petroleum Update : January 2012

C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )

REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP

January 2012

Retail prices for Regular Unleaded Gasoline in the sixteen Caribbean countries reviewed at the end of January 2012, re-

mained relatively stable in nine countries. Marginal decreases were seen in Belize and BVI while the other five countries

saw increases in the range of 1% and 5% when compared to the previous month. The average retail price at the end of Janu-

ary 2012 for the product over the sixteen countries when compared to the average retail price seen in December 2011 re-

mained relatively the same.

NOTE:

*US Gallon = 3.785 L

*Imperial Gallon = 4.546 L

*As at November 1, 2009

MTBE was phased out from

all gasoline blends in Ja-

maica and replaced with

10% Ethanol.

CHART:

See prices for other products at See prices for other products at See prices for other products at www.ceiswww.ceiswww.ceis---caribenergy.orgcaribenergy.orgcaribenergy.org ...

Regular Unleaded Gasoline Average Retail Price (US$/Litre) 2012

COUNTRIES J A NJ A N

ANTIGUA/ BARBUDA 1.23

BAHAMAS [91 OCT] 1.33

BARBADOS 1.55

BELIZE [87 OCT] 1.41

B.V.I. [87 OCT] 1.26

DOMINICA 1.12

GRENADA (95 OCT) 1.23

GUYANA 1.11

JAMAICA 87 Octane[E10] 1.23

MONTSERRAT 1.19

ST. KITTS/ NEVIS 1.20

ST. LUCIA 1.21

ST. VINCENT/GRENADINES 1.19

SURINAME [95 OCT] 1.40

TRINIDAD/[92 OCT] 0.42

TURKS/ CAICOS 1.58

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

US$

/Litr

e

16 Caribbean Countries

Comparative Retail Pump Prices

Regular Unleaded GasolineJANUARY 2012

Caribbean Petroleum Update : January 2012 | Call: 1-876-927-1779 page 7

C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )

International Crude Oil prices over the period Novem-

ber 2011 to January 2012 saw prices on the upward

trend in January when compared to the two previous

months. The highest weekly price seen in January for

the product was US$102.39/BBL - reflected at the

end of the 1st week. Crude Oil prices for the month

of January remained close to US$100/BBL for the

entire month. The average price for the product in

January (US$100.05/BBL) was approximately 2% and

4% higher than December and November 2011 re-

spectively.

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US$/B

BL

76.19

88.14

109.61

38

48

58

68

78

88

98

108

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Avg

US$

/BBL

Period

Average Monthly World Crude Oil Prices (2009 - 2011)

2009 2010 2011

99.32100.08102.39

80.00

85.00

90.00

95.00

100.00

105.00

110.00

115.00

120.00

WK 1 WK 2 WK 3 WK 4 Mth Avg

US$

/BBL

Period

Average Weekly & MonthlyCrude Oil Prices

(Nov-11 - January 2012)

Nov-11

Dec-11

Jan-12