Mr. Speaker, in mid-December 2014, commercial customers of the National Petroleum Corporation on the West Coast of Barbados started to experience low natural gas pressure and in some instances, no gas at all.

Barbados National Oil Company Limited (BNOCL) and National Petroleum Corporation (NPC) responded immediately to this situation by the BNOCL bringing all of its gas wells, including the ???reserved gas wells??? on production to ensure maximum line pressure and the NPC checking the entire transmission and distribution lines for leaks and repairing minor leaks that were identified.

These measures did not however resolve the shortage which resulted from increased consumption by commercial entities, on the one hand, and gradual decline in supply of gas by the BNOCL wells, on the other hand.

Representatives from the technical sub Committee and Boards of both BNOCL and NPC met in a Special Joint meeting on Monday, January 19, 2015 to discuss the natural gas shortage and to approve ways to address the situation in as short a time as possible.??In an effort to mitigate the problem in the short-term BNOCL and NPC have agreed on and are executing actions as follows:

1. The NPC has agreed with a number of large industrial users of natural gas for these users to switch immediately to alternative fuels for the short term.

The recovery of natural gas from two outpost wells:

2. The Company revisited a number of wells whose production had fallen below the economic threshold in the past, and identified two wells with possible potential for gas recovery.

3. The work would entail the connection of these wells to BNOCL???s existing gas-gathering system.

4. It is estimated that this work will be completed within two (2) weeks, with two and three shift per day operations. Permissions for approval from the Landowners and the Ministry of Transport and Works to lay the necessary pipelines have already been or are in the process of being sought.

5. It is estimated that four small Air Mix Plants could be ready for shipping towards the end of January 2015

6. One large air mix plant with built-in redundancy will be installed at Woodbourne, after NPC has ensured the integrity of the pipeline to cope with such an installation.

Transportation of compressed natural gas by trailer mounted vessels:

The work would entail the following:

7. Retrofitting the Gas Plant Facility to receive product by truck.

8. The purchase of trailer trucks and associated equipment to transport product from the well head to the gas plant facility.

9. It is estimated that the work on the infrastructure at the gas plant facility and the importation of equipment would be completed within 3 – 4 weeks.

This suite of measures is estimated to cost $7 million.??Further, in an effort to increase gas production and reserves BNOCL will finalise the relevant contracts and other arrangements in order to resume its expanded drilling programme early in the third quarter of 2015.

From as far back as 2004, both BNOCL and NPC started a process of identifying a mechanism for the importation of natural gas since it was recognised that the local supply of the product would become depleted reasonably early. This process has not yet been successful for reasons beyond the control of both entities. BNOCL and NPC will however continue to seek sources of supply of imported natural gas.

BNOCL was incorporated in 1983 to produce crude oil and associated natural gas onshore Barbados. Its operations are primarily conducted in the Woodbourne, Lower Greys and Hampton areas. Since inception, it has produced over 13 million barrels of oil and 30 billion cubic feet of natural gas.

NPC is the statutory corporation empowered to distribute the natural gas produced by BNOCL. Over the years, it has carried out this service to its 20,000 customers without major interruption.??Both BNOCL and NPC regret the occurrence of this shortage and the impacts that it has caused on the customers of the NPC and the public.

The boards and managements of both corporations are treating the resolution of this problem with the utmost sense of urgency and will continue to devote whatever effort is necessary to overcome this difficulty. In the meantime, both corporations will do all they can to minimize any further possible disruption to customers and the public, and are of the view that the measures outlined earlier will be implemented quickly and efficiently to provide a lasting solution to this shortage.

Author: Prime Minister's Office

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