Taking Phoenix Park to the world

BY ASHA JAVEED

asha.javeed@trinidadexpress.com

YOU know that blue flame that comes from under your gas stove?

That's possible because of liquified petroleum gas (LPG), also known as cooking gas.

And that LPG for the gas stoves of the entire country comes from the Point Lisas-based, Phoenix Park Gas Processors Ltd (PPGPL).

Since the closure of Petrotrin in 2018, PPGPL has been supplying LPG for Trinidad and Tobago. Prior to that, the gas-based business focused on export markets.

The billion dollar subsidiary of the wholly State-owned National Gas Company (NGC), is expanding internationally.

PPGPL has now made two acquisitions in the US-in February 2020, the company closed the acquisition of natural gas liquids (NGL) marketing assets of Twin Eagle Liquids Marketing LLC in Houston. And last month, it acquired an NGL terminal in Hull, Texas from Keyera Energy, one of Canada's largest midstream oil and gas producers.

The acquisitions are a proud feat for its otherwise low-key president, Dominic Rampersad.

And for PPGPL, which celebrated its 30th anniversary last year, those foreign acquisitions are the first two steps in the company's growth strategy as it seeks to stake its place in the globe.

He said following the curtailment issues that NGC suffered a decade ago, the company began to look at different strategies.

While explorer expeditions were made to Ghana and elsewhere in West Africa, Rampersad said he still thought it was about ten years away as a future market.

PPGPL needed to find new markets, and new sources of revenue, in the next five years. So PPGPL turned its sights to North America.

He said in the fourth quarter of 2015, the company got approval from its Board to pursue the international expansion. In an interview with the Sunday Express, Rampersad noted that the acquisitions were fully funded from PPGPL's cash flow.

Rampersad, who has worked at PPGPL for the past 28 years, explained that he had long had the idea to expand the scope of the company's operations. But it was under the guidance of former NGC chairman Prof Gerry Brooks that the plan was pursued.

'Mr Brooks brought an entrepreneurial spirit to the organisation as chairman. He was more willing to take risks. It wasn't all about complying with government policies. You know, let's figure out a way to make some money here. We took a growth strategy to the board and after the first five minutes, he said stop, this is exactly what we need to do,' he recalled.

But it took several years, and long after Brooks had resigned from NGC (he is now chair of the Unit Trust Corporation) before they found the perfect project.

The company had done an assessment of the entire value chain of the LPG business in the Caribbean.

'We discovered that the value that was being earned within T&T was in some cases equal to, and in some cases less than, the value that was being earned outside of T&T.

'So people were taking our product, the product that belongs to our people, repackaging it and earning more money than we were as a country. But when you look at the value chain, we are the producer and we were not sharing in that value chain. So we developed a strategy, which is just called the value chain strategy, which is to participate in strategic investments along the NGL value chain. So we are not going into something that we're not accustomed to but we are going into segments that will be new to us,' he said.

PPGPL hired the Florida-based FTI Consulting to do research on potential acquisition targets.

He said several projects were bypassed until the Twin Eagle opportunity came along.

'This ticked all the boxes because it brought with it a market. All it really was a book of contracts where you're buying products and selling products. But the good thing is it brought in markets. So we did it and we did the investment. It wasn't the biggest investment in the world. But it was something that was fit for purpose for us,' he said.

Last month, PPGPL closed its second acquisition-a terminal to complement the Twin Eagle markets.

'It is very structured and focused,' he said, referring to the terminal acquisition.

In a press statement at the time, the company noted that it can access and aggregate LPG supply to sustain and grow its markets in Mexico, Latin America and the United States.

'This transaction is aligned to Phoenix Park's growth strategy of realising its vision to 'be a recognised global leader in the development of energy-related business,'' the statement had said.

He noted that several functions of the US businesses-the human resources, the public relations, the supply chain, legal and business development -are all being done out of Point Lisas from a shared-service model.

He said since the purchase of the terminal assets, more entities have become interested because the brand has grown.

'It's not just about CSR but it is also about creating value. So everybody has gotten this boost. It's been amazing,' he said.

As the company now operates internationally, Rampersad said they are also upskilling for the future. And the company has hired 20 graduates to train and provide a futuristic view of the organisation.

Rampersad's other source of pride?

The company's safety cultureonly one incident in its 30 year history.

PPGPL is 100 per cent owned by T&T-it is 51 per cent owned by the NGC, 39 per cent owned by publicly listed company NGL, and 10 per cent by PanWest.

In its last quarter report, for the nine months ended September 30, 2021, NGL recorded profit after tax of $134.13 million, which was more than four times greater than the $29.95 million it reported for the same period in 2020.

How PPGPL works

PPGPL grew over the years as gas production increased, along with the increase in prices. Its asset base grew from US$100 million to US$600 million.

PPGPL business is reliant on gas which it sources domestically from two places- Atlantic LNG and from its parent company, the NGC.

'We have three commercial agreements with Atlantic, because as part of their LNG process, they also produce natural gas liquids. So what we have is a pipeline that connects the Atlantic to Phoenix Park. And Atlantic delivers the natural gas at the mouth of the pipeline, and we bring it to Point Lisas,' he said.

T&T's natural gas consists of five components- ethane and methane (which goes into LNG and in Point Lisas for the manufacture of methanol and ammonia) and three other components called propane, butane and natural gasoline.

PPGPL takes out the propane, butane and natural gasoline from the natural gas.

Those three components are extracted, liquified, separated, stored and then 90 per cent of it is exported.

The 10 per cent that remains is LPG which is sold to National Petroleum (NP). 'The propane and butane are what is referred to as LPG or cooking gas. So since Petrotrin shut down we have been supplying the country with its cooking gas. So now under every good pot is PPGPL. We make sure that the country is supplied before we commit our export contracts,' he said.

PPGPL's costs are fixed, while NP's costs are subsidised by the Government.

Its exports go primarily into the Caribbean market and the natural gasoline goes to international markets, like Europe and West Africa.

He noted that most the company's earnings are in US currency.

A family of public servants

Rampersad, 55, idly joked that he never needed to borrow money from his sister Karen for his business.

Which Karen? Karen Darbasie, chief executive of First Citizens and chairman of Tringen.

He said that growing up he was usually known as her little brother.

But Rampersad's family stock is littered throughout the country's public service-his father was a former PS in the Ministry of Finance, Reynold Rampersad and his mother, Head of the Central Statistical Office, Margaret Rampersad.

His uncle was Frank Rampersad.

His takeaway?

Work hard and serve. He started his career as an auditor at Ernst & Young (EY) but quickly got bored after six months.

'It was not for me; you don't create anything. You're always looking at other people's work,' he observed.

He left EY and joined the public service himself, working at NIHERST with Maureen Manchouck, the person who he said had the biggest impact on his career.

'I went in there as a young, arrogant accountant and she knocked me into shape. The important thing is that she taught me how to think and write. She was a good mentor. And she also introduced me to my wife,' he said.

'The interesting thing about working in Government service is that you learn to get your work done with very little resources. So you have to learn how to improvise. Things like shredding paper if the other side of the sheet is not used is a no-no,' he recalled.

STRATEGIC INVESTMENTS: President of Phoenix Park Gas Processors Ltd (PPGPL) Dominic Rampersad.