First gas from Touchstone delayed by two weeks /

Bad weath­er and ‘usu­al con­struc­tion de­lays’ are be­ing blamed for the two-week de­lay in first gas flow­ing from Touch­stone’s Co­ho dis­cov­ery which has now been pushed back to the mid­dle of June, ac­cord­ing to Paul Baay, the com­pa­ny’s Chief Ex­ec­u­tive Of­fi­cer.

In an in­ter­view with the Busi­ness Guardian, Bay was asked if Touch­stone will meet its pro­posed date to de­liv­er nat­ur­al gas to the Na­tion­al Gas Com­pa­ny (NGC) of May 30. He said, «We are not. We are prob­a­bly go­ing to be a cou­ple weeks late. We are shoot­ing for around the June 14 or 15.»

Once gas starts flow­ing from Co­ho it will be the first on land nat­ur­al gas de­vel­op­ment since the then British Gas start­ed pro­duc­ing from its Cen­tral Block.

Ini­tial­ly the gas com­ing from Touch­stone will on­ly by 10 mil­lion stan­dard cu­bic feet per day (mm­scf/d) but that is ex­pect­ed to be ramped up to 100 mm­scf/d by the time it brings on its Cas­cadu­ra de­vel­op­ment by the end of 2022.

«The next fa­cil­i­ty com­ing on, we’re look­ing at Oc­to­ber and that will start at 60mm­scf/d and should get to 90mm­scf/d by the end of the year, that com­bined with the 10 mm­scf/d that’s com­ing on in the next two to three weeks will get us to the 100mm­scf/d,» Baay added.

This will be wel­comed news for the coun­try which is in dire need of nat­ur­al gas and when it is ful­ly ramped up in 2023 could pro­vide enough gas for half of the coun­try’s re­quire­ment for elec­tric­i­ty gen­er­a­tion. It must be not­ed this is a new de­vel­op­ment and will be a net ad­di­tion to the coun­try’s oil and gas pro­duc­tion.

Baay ex­plained that Touch­stone is await­ing en­vi­ron­men­tal clear­ance and when that oc­curs he is hop­ing the pro­duc­tion out of its Or­toire block will get to as high as 200 mm­scf/d, with sus­tained pro­duc­tion over three to five years of at least 150mm­scf/d.

«We are on­ly bring­ing on the first two wells at our Cas­cadu­ra, that’s 90mm­scf/d. We are in the midst of putting in an ap­pli­ca­tion for an en­vi­ron­men­tal im­pact as­sess­ment which should come down in a lit­tle while, which should al­low us to drill eight more wells and those wells should al­low us to add an­oth­er 100 mm­scf/d. That should take us to about 200mm­scf/d. But cer­tain­ly we can main­tain at 150mm­scf/d,» he said.

Touch­stone’s CEO is hop­ing the com­pa­ny gets is en­vi­ron­men­tal clear­ance soon and ex­pects to drill the wells in ear­ly 2023 and have the ad­di­tion­al gas by the end of 2023.

He said, «Ba­si­cal­ly the ideas is to get up to that 180/200 mm­scf/d and then ba­si­cal­ly what you have af­ter that is we just drill to fill.»

What price will NGC

pay for Touch­stone gas?

But while the short­age of nat­ur­al gas is a ma­jor is­sue, so too is the is­sue of price. Baay said the price ne­go­ti­at­ed with the NGC was not as high as gas is be­ing sold for at the mo­ment, with no clause link­ing it to com­mod­i­ty prices like am­mo­nia and methanol.

«We have ne­go­ti­at­ed a price, we can’t dis­close this be­cause of con­fi­den­tial­i­ty agree­ments but yes we have ne­go­ti­at­ed a price…..Well it was ne­go­ti­at­ed dur­ing Covid so it is cer­tain­ly low­er than the gas price we are see­ing right now, but that was the deal and that’s the ben­e­fit of a long-term price that you get. You get the cer­tain­ty of the fixed price over four or five years, which is im­por­tant to us, be­cause we got a lot of cap­i­tal to spend, so it al­lows us to bud­get for that cap­i­tal.»

Not on­ly will the coun­try ben­e­fit from more gas but it is rich in liq­uids lead­ing to high­er crude pro­duc­tion via 2,000 bar­rels of con­den­sate a day and more op­por­tu­ni­ties for TTNGL.Asked about the Roys­ton dis­cov­ery which is light sweet crude oil, Baay not­ed that the com­pa­ny need­ed the funds from its gas pro­duc­tion to drill out the oil dis­cov­ery.

«If we could, we would like to drill it right away, but we want to wait un­til we got the gas on pro­duc­tion be­fore we move the rig. Just be­cause we need that cap­i­tal. We need rev­enue from the gas side to help us drill the oil side,» said Baay.

He added, «We think over the next cou­ple of years we should be able to get at least 5,000 bo/d. If com­bined with the con­den­sate and oil it will take us to 7,000 bo/d.»

In an in­ter­view ear­li­er this year Baay told the Busi­ness Guardian, «If you look at Pe­nal block, it has pro­duced over 100 mil­lion bar­rels of oil, and this is 1938 and it is ba­si­cal­ly a look alike to what we found at Roys­ton, like sim­i­lar depths, sim­i­lar type of crude, so I am not sure peo­ple ful­ly un­der­stand how sig­nif­i­cant the Roys­ton dis­cov­ery was.»

He was asked about the ex­tent of the fault­ing in the area which has made T&T no­to­ri­ous in its in­abil­i­ty to re­cov­er a lot of the oil it has dis­cov­ered with rates that range be­tween five per cent and 10 per cent on-land and off­shore be­tween 15 and 20 per cent, when the glob­al stan­dard is of­ten over 40 per cent.

«There is, and that is one of the beau­ties that we have of the seis­mic. We have got re­al­ly good res­o­lu­tion on it, there are some big faults but that struc­ture over­all, it’s kind of the same, again if you look at Pe­nal/Bar­rack­pore it is split in­to, call it sev­en dif­fer­ent fields, but it is still all in that same hori­zon, in that same ge­ol­o­gy struc­ture.

Roys­ton may end up be­ing that way where it is five or six dif­fer­ent fields but where it is over­all the oil we have en­coun­tered both in the over­thrust and in the in­ter­me­di­ate sheet are just fan­tas­tic, its beau­ti­ful low 38 Api oil, there is a huge de­vel­op­ment play on it, when I say hun­dreds of mil­lions of bar­rels, that’s oil in place so whether you want to put a 5 or 10 or 20 per cent re­cov­ery fac­tor on it, it kind of gives you a re­cov­ery fac­tor,» he added.

Jobs be­ing cre­at­ed

Baay said the de­vel­op­ment will lead to jobs be­ing cre­at­ed in the Rio Claro area with op­por­tu­ni­ties for op­er­at­ing both the Co­ho fa­cil­i­ty and the Cas­cadu­ra fa­cil­i­ty. There will al­so be a need for se­cu­ri­ty ser­vices, main­te­nance and op­er­a­tion.

Baay es­ti­mates at least 28 peo­ple will be em­ployed.

LINK ORIGINAL: The Trinidad Guardian

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