Gregory McGuire
The Governor of the Central Bank of T&T, Mr. Larry Howai, has suggested that the idling of Methanex’s Titan methanol plant need not result in a net loss of foreign exchange to this country; that gas freed by the shutdown could be diverted to LNG or other petrochemical facilities, potentially generating equal or greater earnings for wholly state-owned National Gas Company(NGC) and the country. With respect to Mr. Howai, this view, while not without theoretical basis, represents the most optimistic of several possible outcomes and rests on market conditions and commercial choices that are by no means guaranteed to materialise.
Economics is not an exact science. Every forecast is built on assumptions, and the difference between an optimistic and a pessimistic forecast lies precisely in those assumptions. Mr. Howai has assumed the best case. A rigorous analysis requires us to examine whether the conditions necessary for that best case actually exist. I would suggest they do not — or at least not to the degree his statement implies.
The LNG option: Already exhausted
NGC holds a 10 per cent equity share in Atlantic LNG’s operating trains, entitling it to a proportionate share of processing capacity. Critically, it has already been reported that NGC reduced its contracted gas allocations to Point Lisas petrochemical plants to their minimum quantities precisely in order to maximise utilisation of its LNG entitlement. In other words, NGC has already been diverting gas to LNG at the expense of petrochemicals. The spare LNG processing capacity that Mr. Howai implies may exist, is in all likelihood already fully committed.
The remaining 90 per cent of Atlantic LNG capacity belongs to Shell and BP. Whether those companies are willing to purchase surplus NGC gas and process it through their own capacity is a commercial decision that rests entirely with them. Their rational calculus is straightforward: they will prefer to process their own upstream gas — on which they have already incurred production costs — rather than purchase additional volumes from NGC for incremental processing. There is no commercial incentive for them to absorb NGC’s surplus, and no mechanism to compel them to do so.
The Point Lisas option: A buyers’ market
The remaining petrochemical plants on the estate — PLNL, Tringen, and the Proman Group — are the other proposed outlet. The question is not whether these plants could theoretically take more gas; it is whether they would want to, at what price and in what market environment.
Methanol prices, after averaging roughly US$330–350 per tonne in late 2025 and early 2026, have risen to approximately US$500–525 per tonne in the second quarter of 2026. This increase has been driven by Middle East supply disruptions rather than any structural improvement in demand. This spike may prove temporary. Ammonia prices remain in a wide range of approximately US$320–500 per tonne, with no strong upward trend.
But the deeper commercial point is this: every remaining Point Lisas operator knows that NGC has contracted gas it can no longer sell to Methanex. That is not a seller’s market — it is a buyers’ market. The very fact that Methanex refused NGC’s gas at the proposed price signals to every other customer that NGC may be willing, indeed compelled, to negotiate. The rational question for any plant operator is not ‘will we pay what Methanex refused to pay?’ but how far below that price can we now negotiate?’ The Governor has not addressed that dynamic at all.
How much gas are we actually talking about?
To appreciate why the reallocation argument is difficult in practice, consider the volumes involved. Titan and Nutrien together consumed an estimated 170 MMcfd of natural gas at nameplate capacity — approximately 155 MMcfd at realistic utilisation rates, representing about 6.2 per cent of the entire national gas supply, or a 17 per cent share of what the petrochemical sector at Point Lisas was consuming. Roughly one in six gas molecules that was flowing to Point Lisas petrochemicals has now been cut loose, with no confirmed buyer. The Governor’s reassurance implicitly assumes that volume can be seamlessly placed elsewhere. The analysis above suggests it cannot — at least not on the terms, timescale or price that would make the country whole.
The risk not mentioned
There is a dimension to this analysis that has received no public attention. NGC operates under long-term contracts with upstream producers — bpTT, Shell, EOG Resources and others — that typically include take-or-pay provisions. Under these clauses, NGC is obligated to pay for a minimum contracted volume of gas whether or not it can find buyers downstream.
If NGC cannot place Methanex’s former gas allocation with LNG or other petrochemical buyers — which, for the reasons above, is a real and material risk — it does not simply lose revenue. It faces contractual payment obligations to upstream producers for gas it never sold. This would not merely negate Mr. Howai’s optimistic scenario; it would add a direct financial liability to NGC’s balance sheet, one that ultimately falls on the state. The Governor made no reference to this risk. He should have.
The structural argument
Mr. Howai’s response, while understandable as an attempt to reassure markets and the public, illustrates a pattern of official commentary that consistently presents the most favourable interpretation of each successive petrochemical closure, while declining to engage with the structural deterioration of which each closure is a symptom. Atlas, Nutrien and Titan, major shutdowns by two companies, actual or announced, comprising a total of seven plants. The decisions of Methanex and Nutrien were discussed as though they were isolated events capable of being offset by market adjustments.
The cumulative foreign exchange exposure — conservatively US$500–700 million per year in lost export earnings from the five Nutrien ammonia plants and the Titan methanol plant combined — is not a number that optimistic assumptions about gas reallocation can easily make disappear. It is a structural hole in the current account at a time when the country can ill afford one.
What T&T needs from its technocratic leadership is not reassurance that every negative development can be turned into a positive. It needs an honest assessment of the conditions under which the Governor’s scenario would materialise, the conditions under which it would not, and the policy interventions required to tilt the odds toward the better outcome for the company and the country. That assessment has not yet been offered.
The Governor is an experienced economist and banker. He knows the Central Bank’s role is not to champion the most optimistic scenario. T&T needs more than optimism right now.
Gregory McGuire, an economist and business strategist, is the CEO of VSL Consultants Ltd. He is a former Central Bank economist and worked at NGC.
