An ever-changing environmentOctober 26, 2020
Dominic Rampersad, president of Phoenix Park Gas Processors Limited (PPGPL), talks to The Energy Year about how the company plans to remain competitive in a volatile sector and the continuing role of natural gas as a crucial feedstock. Established in 1989, PPGPL is a subsidiary of the National Gas Company (NGC).
How would you introduce the company and its business model?
PPGPL was formalised as a company in 1990 and produced its first molecule of hydrocarbons on June 15, 1991. Our business model at the time was simple; we were commissioned to “clean up” the natural gas stream for companies using the product as an input to make other commodities such as ammonia and methanol and for use in the power supply sector in Trinidad and Tobago.
This situated us directly in between the upstream extraction businesses and the downstream producers who use the “clean” natural gas as feedstock. In those days, we were owned by NGC, ConocoPhillips and Pan West Engineers & Constructors – a joint venture enterprise which provided us with the best of both worlds, i.e. the opportunity to pioneer gas processing technology for Trinidad and Tobago and thus further enhance and develop our natural gas monetisation capability and the opportunity to learn and develop under the international tutelage of ConocoPhillips.
We have been able to produce, market and sell over 85 million barrels of NGLs since inception and have established ourselves as the preferred regional supplier of LPG within the Caribbean as well as the sole local supplier since the closure of the Petrotrin refinery in 2018.
PPGPL has a large storage capacity of 1.25 million boe. Does this allow you to weather storms such as price and demand shocks?
Our storage capacity has certainly been very beneficial to our bottom line. Starting in 1996 with the Phase 1 upgrade project, followed by other expansion initiatives over the years ending in 2011, all of these very measured projects ensured that we cemented our position in the energy value chain not only in Trinidad and Tobago but regionally as well. Our facilities do allow us some flexibility to manage varying market conditions; however, our focus has been to maximise production and expand our customer base.
Is natural gas still seen as a transition fuel between more polluting hydrocarbons and renewables?
Natural gas in its purest form is a relatively clean fuel which is more efficient and creates less of an impact to the environment than oil and its related refined products when used as a fuel source. Its use as an alternative fuel did initiate the transition from “more polluting hydrocarbons” such as oil to a cleaner fuel source in order to reduce the harmful effects of emissions on the environment and world population.
Its subsequent use as a feedstock for downstream industries proliferated exploration activities and the switch in focus from oil to gas. Raw natural gas contains impurities and various carbon compounds apart from methane which require removal for it to be used efficiently and to derive the best value. This requirement created the need for gas processing facilities and if the demand for natural gas remains significant based on availability and price, there will continue to be a place in the industry for PPGPL and like facilities.
The move to renewable energy is driven by climate change and the desire to protect our planet. Hydrocarbon availability, while still abundant, will eventually diminish and become more expensive to extract and process while renewables will become cheaper and more accessible to the wider population. This very clean and abundantly available energy supply can eventually replace natural gas as a fuel source but cannot be used as a feedstock for the petrochemical industry.
The Covid pandemic has caused significant losses to oil and gas and petrochemical companies and they will accelerate their plans to become more efficient, which will mean phasing out aspects of their operations which are higher risk and cost. This can mean increased focus on developing and using renewables.
Given the increased use of LPG, derived from NGLs, in the transport industry as part of the move to cleaner fuels as well as its use in the downstream industry, power generation, commercial and domestic applications, our products continue to be in demand and we foresee a place in the medium term for the gas processing industry.
How will PPGPL remain competitive in a volatile sector?
I think the key for any business to remain competitive is to constantly adapt to the market and the needs of customers, and at PPGPL we are not exempt from the volatility of market conditions. A few years ago, we began developing strategies which are focused not necessarily on our core business of gas processing but on diversification of our business portfolio. There is no set playbook for responding to a changing market in any business, but being focused on what your business reality is and coming up with the necessary mitigation strategies to weather the storms of volatility is what allows businesses to have longevity.
Another key aspect to remaining competitive is ensuring that you have the right people doing the right jobs, so at PPGPL we are constantly training our employees and encouraging them to pursue programmes that allow them to remain relevant in an ever-changing environment. A careful and calculated approach is required in looking to the future and understanding evolving trends so that appropriate plans can be developed and implemented and PPGPL has always adopted this approach.
Do end users expect to see, or will they now expect to see, commitments towards more environmentally friendly production?
Well, that goes without saying. We’ve always been committed to doing no harm to the environment and this is part of our safety motto: “Our work is never so urgent or important that we cannot do it safely or in a manner that preserves the environment.” Every employee that walks through our doors, whether they are permanent or on contract, an intern or on a temporary assignment, whether they are a contractor, service provider or even a caterer, learns very quickly what we mean by these words.
These are not mere words for us at PPGPL. It’s our guiding philosophy of how we operate our businesses. PPGPL is focused on reducing its carbon footprint as it continues its journey to be recognised as a best-in-class NGLs business now and beyond.
What was the rationale behind the acquisition by your US subsidiary of the NGL marketing assets of Twin Eagle Liquids Marketing?
PPGPL has been involved in the production of NGLs in Trinidad for the past 29 years. Over this time, significant capacity has been developed using largely indigenous resources. These include financial capacity as well as operations, marketing and project development capacity. Given that PPGPL depends solely on the production of NGL molecules in Trinidad to sustain its business, our strategic planning process logically yielded a goal of diversifying the business by participating in what is the largest NGL sector in the hemisphere, that is the North American midstream production sector.
What can PPGPL do that it could not do before, besides having a foothold in the lucrative US market?
Now that PPGPL has a cadre of experienced marketing professionals in its new subsidiary companies, Phoenix Park Energy Marketing (PPEM) in Houston and Phoenix Park Canada Energy Marketing (PPCEM) in Calgary, the capacity to source competitively priced NGL volumes is now a new capability which has been added to the PPGPL group of companies. This expertise can be leveraged both in sourcing additional product for the North American markets as well as for PPGPL’s traditional Caribbean and Central American market. The new team is also focused on identification of new business opportunities in North America.
What message does this send about the strength and viability of Trinidadian companies in the energy industry?
This acquisition, being the first for any Trinidadian state enterprise, sends a strong message that the indigenous Trinidad energy sector is coming of age and that our strengths can be leveraged into becoming a significant global player in the future. The Trinidad production centre remains critical in differentiating PPGPL as a player with a significant and ongoing operational track record.
Do you feel an added weight of responsibility since 75% of TTNGL, and therefore PPGPL, is owned by the public?
PPGPL has always worked to create the best returns for a myriad of stakeholders, most of whom are based in Trinidad and Tobago. Whether delivering dividends to our corporate and individual shareholders, or from the perspective of contributing to the national purse via taxes, and providing job security for our employee population, we have always set stretch targets, which we seek to outperform each year.
We are aware of the expectations of the public and will continue to engage in safe operations, maintain the integrity of our assets and ensure our reporting is accurate.
What measures have you taken to ensure safety during the Covid-19 crisis?
We were observing the global situation unfold for quite some time before it was confirmed that it had reached our borders. One of PPGPL’s strengths is its HSSE and emergency response plans. So, while they may be geared toward specific business emergency situations, we were able to adapt it for our response to the pandemic. Since we are a 24-hour operation, our priority was how we keep our process plant operators, required employees and contractors safe.
Our response was therefore categorised according to risk, priority and business output required. One of the first simple measures we established was our work from home (WFH) policy and procedure and limiting the number of persons who were accessing our plant facility and control room. This measure ensured that only persons who were necessary to keep the facility up and running were at the facility. Our protocols obviously were centred on the safety of our people first.
Some of our measures include: activation of our Incident Command System (ICS) for management of any disruption to our business; travel restrictions on all employees including a mandatory 14-day quarantine for those employees who may have travelled during the initial period of the pandemic; instituting a WFH policy and procedure for all “non-essential” employees; temperature screening at our plant facility for all persons; providing appropriate PPE for “essential” employees; increased sanitisation; complete review of operations projects to determine what could be done, which included the postponement of our facility-wide shutdown which was carded to begin in April; development of a strategic manpower plan; and the enhancement of our EAP [employee assistance programme].
What are your hopes for 2020 and beyond?
Firstly, I hope that the scientists come up with a safe vaccination for Covid-19 that can be mass produced quickly and disseminated freely to all people. This pandemic has had the single most terrifying yet unifying impact on populations worldwide. We as global citizens have come together in a way that I’ve never experienced before in my lifetime – unified in purpose, unified in coming up with solutions, unified in helping those who are most vulnerable and to me, these are the things that will ensure our survival if we continue to be focused on our collective humanity even after this is eradicated, rather than our differences.
Secondly, at PPGPL we remain steadfast regarding our local and internationalisation strategies. While some may be tweaked here and there, for the most part, we will continue with our plans to achieve our objectives.
Finally, PPGPL is a unique place to work. One of the things that makes us unique is our annual corporate meeting, which is usually held with all our employees at the beginning of the year to outline work plans and strategies for the year and beyond.
This session is usually dynamic and enriching for employees at all levels and for the past couple of years, the meeting themes have been focused on encouraging our employees to adapt to the changing demands of the market and customers, to instil a global mindset in every individual in preparation for where we are going and to foster a constructive culture that embraces our strengths and removes the barriers that don’t align with where we are headed. These are my hopes for the immediate future and beyond in a summarised form.
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