Raphael John-Lall

raphael.lall@guardian.co.tt

En­er­gy Min­is­ter Franklin Khan has jus­ti­fied Yara Trinidad Ltd’s de­ci­sion to close one of its plants at the end of De­cem­ber.

Yara Trinidad Ltd is one of the en­er­gy in­dus­try’s down­stream com­pa­nies that pro­duces am­mo­nia.

Un­able to cope with high­er nat­ur­al gas prices from NGC and low­er glob­al prices for am­mo­nia, the com­pa­ny made the de­ci­sion to shut down one of its plants, tak­ing with it five per cent of the coun­try’s am­mo­nia pro­duc­tion with the pos­si­bil­i­ty of job loss­es.

Speak­ing yes­ter­day at the launch of the Ry­der Scott Gas au­dit re­port launched at the Min­istry of En­er­gy, Lev­el C, In­ter­na­tion­al Wa­ter­front, Port-of-Spain, Min­is­ter Khan said, “I do not want to over-beat the Yara horse. The fun­da­men­tal is­sue with that com­pa­ny is that the plant is 50 years old. It is very in­ef­fi­cient and its con­ver­sion ra­tio is way be­yond in­ter­na­tion­al stan­dards; even by Yara’s stan­dards.

“There are two is­sues: ef­fi­cien­cy of Point Lisas, es­pe­cial­ly as it re­lates to the old­er plants that were not up­grad­ed through time, and, sec­ond­ly, the gas pric­ing regime. The days of sig­nif­i­cant­ly cheap gas that T&T was able to of­fer 20 years are long gone so to com­pete with this new gas val­ue chain, there must be com­pet­i­tive plants.”

Khan added that is why they have an­nounced through the NGC the con­clud­ed new gas sup­ply agree­ments with Nu­trien and Caribbean Ni­tro­gen Com­pa­ny (CNC) be­cause they op­er­ate fair­ly ef­fi­cient plants.

A Yara me­dia re­lease last week said: “The clo­sure is pro­vi­sion­al­ly ex­pect­ed to gen­er­ate costs of ap­prox­i­mate­ly US$25 mil­lion which will be clas­si­fied as a spe­cial item in Yara’s fourth-quar­ter 2019 re­sults. The book val­ue of the plant is ze­ro, fol­low­ing sev­er­al his­tor­i­cal as­set im­pair­ments.”