A bright new dawn at La Brea

Outlook is promising for planned panamax repair yard in Trinidad

It came as good news when it finally came. Trinidad & Tobago’s Minister of Finance, Colm Imbert, announced to the House of Representatives and the Senate that the go-ahead was being given for a new US$ 500 million shipyard.

It will be located on an adjacent Green-field site of what was intended to be the Alutrint smelter at La Brea (see panel story). The smelter was never completed and construction work stopped in 2010.

The project to design, build and finance a new repair facility at La Brea had originally been proposed in 2010 by the Shipbuilding & Repair Development Company of Trinidad & Tobago Ltd (SRDC). So, after nearly five years of studies and intense lobbying, the local stakeholders of the project had reason to celebrate.

The recent drop in global energy prices no doubt influenced the decision as the T&T government saw a growing need to diversity its economy away from one overly dependent on oil and gas.

This large-scale industrial project, which has already been endorsed by residents and environmentalists alike, will create opportunities to drydock panamax vessels. To accommodate ships of this size will require dredging to 13.5 meters depth (16.5 meters in the future).

Aframax

There will also be alongside repair berths to handle tankers up to aframax size (80,000 to 120,000 dwt). Regionally, these are used mainly to transport crude oil between refineries in Venezuela and the United States.

In 2014, according to the US Energy Information Administration (EIA), Venezuela was the fourth-largest supplier of imported crude oil to the US after Canada, Saudi Arabia and Mexico.

The contractor for this project is the China Harbour Engineering Company (CHEC), which is expected to complete dredging work and construction of the new shipyard in 2018. Project financing was arranged by the T&T government and the Export-Import Bank of China. Shiprepair is highly competitive, of course, and SRDC envisages the new shipyard operating on a 24/7 basis for both scheduled and emergency repairs.

The shipyard’s chief executive, Wilfred de Gannes, said: “Recent studies undertaken by the Arthur Lok Jack Graduate School of Business located at their Mount Hope Campus, together with the SRDC, anticipates a directly employed workforce in the vicinity of 600 employees at a one-third utilization rate or 1,200 employees at two-thirds utilization rate (in effect, full capacity).”

The aim is to operate the shipyard using similar labor practices to those in North America, Europe and the Middle East whereby job opportunities are announced locally first, but unfilled positions are then advertised internationally.

The current situation across the Gulf of Paria may also benefit the project. Mr de Gannes said: “Venezuela may be one source for qualified employees, many of whom have gained decades of experience from their energy sector.”

There are wider aspects to the building of the new shipyard beyond economic diversification and job creation, however, and these relate mostly to the fast-changing patterns of energy use and to major political decisions elsewhere. For example, the recent lifting by the US Congress of its 40-year ban on exports of crude oil, together with the commissioning of Cheniere Energy’s Sabine Pass LNG terminal in Louisiana, have made the decision to proceed with the La Brea project timely.

Now that the ban is lifted, the US is expected to change from a net importer of natural gas to a net exporter – especially with the expected completion of five large-scale liquefaction plants (for converting natural gas to LNG). It is estimated that, by the time these five new facilities are fully operational in 2020, at least 100 new LNG carriers will be required to handle shipments from the US.

Those behind the La Brea project believe the shipyard can benefit directly from an increase in shiprepair work required by these additional LNG carriers, which will be moving cargo from the US Gulf Coast via the expanded Panama Canal en route to Asia. It is anticipated that the commissioning this year of the third lock in Panama will shorten LNG carrier voyages to Asia by some 8,600 km and the enlarged waterway will now be able to accommodate 92 per cent of the world’s LNG fleet.

Liquefaction plant

Another plus point is that La Brea yard will be close to Trinidad’s own Atlantic LNG four-train liquefaction plant at Point Fortin, which recently saw its 3,000th shipment. Furthermore, Atlantic LNG is set to process additional natural gas from the giant 10.25 trillion cu ft Loran-Manatee field, on the maritime borders of Trinidad and Venezuela.

So, with the much-awaited canal expansion a reality, and the anticipated hemispheric increase in LNG exports from both the US and Point Fortin, the prospects for Caribbean-based LNG carrier repair capacity looks very promising indeed. And it’s why investors are willing to stump up US$ 500 million to get this new shipyard off the ground.

New use for Alutrint facilities

Before the smelter project was cancelled, Alutrint was in the process of installing overhead bulk conveyor equipment and covered storage facilities. The portside conveyor structure has already been dismantled and removed.

Buildings related to storage of materials for the former smelter can possibly be reconfigured to provide adjacent off-site facilities in support of the new shipyard to be located north-east of Alutrint’s Brighton terminal.

Alutrint was a joint venture between the National Gas Co of Trinidad & Tobago and Venezuela’s Sural Group. The proposed smelter also had financial backing from the Chinese.

A century-old tradition

Shipbuilding and shiprepair are not new to the island of Trinidad. The local stakeholders in the project have many decades of experience in repairing ships of all types and sizes. In fact, commercial shiprepair was first started at Chaguaramas, north-west Trinidad and goes back to 1907 when a floating dry dock was installed by Ellis Greil & Co.