Cur­tis Williams

cur­tis.williams@guardian.co.tt

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

In an in­ter­view with the Guardian last night Pres­i­dent and Plant Man­ag­er of YTL, Richard De La Bastide, said the com­pa­ny could not reach agree­ment with the NGC for a new gas price af­ter 16 months of ne­go­ti­a­tions and while it is hope­ful it could reach agree­ment for Trin­gen 1 and Trin­gen 2, it is still with­out agree­ment and there­fore un­cer­tain.

He said: “We think it is high­ly un­like­ly we will get at a price that will al­low us to op­er­ate the plant, there­fore it is our in­ten­tion to close the plant.”

Asked what is the fu­ture of Trin­gen 1 and Trin­gen 2 which is ma­jor­i­ty-owned by Na­tion­al En­ter­pris­es Lim­it­ed, with Yara own­ing 49 per cent, De La Bastide said he was hope­ful there could be an agree­ment on a new gas price, but was quick to point out that ne­go­ti­a­tions are on­go­ing.

The com­pa­ny an­nounced yes­ter­day that come the end of De­cem­ber it will cease op­er­a­tions of its Yara plant.

YTL press re­lease read: “Over the last three years, YTL has im­ple­ment­ed a fo­cused strate­gic re­sponse to a num­ber of struc­tur­al chal­lenges oc­cur­ring in the am­mo­nia mar­ket. Fol­low­ing a thor­ough re­view the com­pa­ny is left with no choice but to cease op­er­at­ing the Yara plant by De­cem­ber 31st, 2019. “

It added: “This de­ci­sion comes af­ter sev­er­al ne­go­ti­at­ing ses­sions with The Na­tion­al Gas Com­pa­ny of Trinidad and To­ba­go (NGC), which failed to reach an agree­ment that could sus­tain the op­er­a­tion of the Yara Plant.”

De La Bastide said he was un­able to re­veal the dif­fer­ence in the price be­ing de­mand­ed by the NGC and what it could af­ford to pay be­cause of Non-Dis­clo­sure Agree­ments.

The clo­sure of the plant brings to 5 ma­jor plants in the that have been shut down since the Row­ley ad­min­is­tra­tion came to pow­er and the fourth plant to be moth­balled on the Point Lisas In­dus­tri­al Es­tate.

Trinidad and To­ba­go has been suf­fer­ing from nat­ur­al gas short­ages since 2011 with the NGC not sup­ply­ing the plants with suf­fi­cient gas. This has led to an in­crease in their unit pro­duc­tion cost and made the plants less prof­itable.

Added to this with the new gas prices ne­go­ti­at­ed by the Prime Min­is­ter Dr Kei­th Row­ley and Na­tion­al Se­cu­ri­ty Min­is­ter Stew­art Young it has meant that the NGC is now pay­ing sig­nif­i­cant­ly more for nat­ur­al gas from BPTT, EOG and Roy­al Dutch Shell which they have been try­ing to pass on­to the down­stream com­pa­nies, but which the petro­chem­i­cal com­pa­nies have com­plained they are un­able to pay.

Added to this, low­er glob­al com­mod­i­ty prices, due to cheap nat­ur­al gas in the US, and the down­stream petro­chem­i­cal com­pa­nies are in jeop­ardy.

A re­cent re­port on the down­stream by for­mer head of the Eco­nom­ic De­vel­op­ment Board Dr Ter­rence Far­rell had warned that plants will have to close down on the es­tate if the gov­ern­ment did not act quick­ly to fix the chal­lenges in the down­stream sec­tor.

The NGC ac­knowl­edged the clo­sure but in­sist­ed that it too had been neg­a­tive­ly im­pact­ed by a chal­leng­ing op­er­at­ing en­vi­ron­ment and had done its best.

In a state­ment, the com­pa­ny said: “Like Yara Trinidad Lim­it­ed, NGC has al­so felt the ef­fects of the volatile and chal­leng­ing en­vi­ron­ment cur­rent­ly fac­ing both the lo­cal and glob­al en­er­gy sec­tor. NGC has used its best ef­forts to mit­i­gate the ef­fects of these chal­lenges on its val­ued cus­tomers on the Point Lisas In­dus­tri­al Es­tate.”

The NGC said it had made ef­forts to im­prove the sit­u­a­tion at the es­tate by se­cur­ing gas from the up­stream for the fu­ture; im­prov­ing sta­bil­i­ty and re­li­a­bil­i­ty of sup­ply; buffer­ing down­stream from up­stream dis­tur­bances; fo­cus­ing on en­er­gy ef­fi­cien­cy ini­tia­tives; play­ing an ac­tive and vis­i­ble role in find­ing so­lu­tions to the chal­lenges in var­i­ous fo­rums, in­clud­ing PLEA (with all mid­stream and down­stream CEOs); ac­tive par­tic­i­pa­tion at lo­cal and in­ter­na­tion­al En­er­gy Con­fer­ences, shap­ing dis­cus­sions on mar­gin­al fields and en­sur­ing greater col­lab­o­ra­tion with the GORTT and all stake­hold­ers in the gas val­ue chain; while re­duc­ing claims through com­mer­cial res­o­lu­tion amongst oth­ers.

It said: “These ini­tia­tives have been suc­cess­ful in im­prov­ing the sup­ply of gas to the do­mes­tic petro­chem­i­cal in­dus­try and

en­abled NGC in re­cent times to ex­e­cute re­new­al agree­ments with Caribbean Ni­tro­gen Com­pa­ny Lim­it­ed, Ni­tro­gen

(2000) Un­lim­it­ed and Nu­trien in re­spect of their am­mo­nia plants on the Point Lisas In­dus­tri­al Es­tate.”

At present, NGC is in ad­vanced stages of ne­go­ti­a­tions for re­new­al agree­ments with oth­er cus­tomers on the Point Lisas In­dus­tri­al Es­tate in­clud­ing two af­fil­i­ate am­mo­nia plants of Yara Trinidad Lim­it­ed, Methanex and Pro­man Group.

Op­po­si­tion MP Rudy In­d­hars­ingh told the Guardian he is wor­ried about the sit­u­a­tion say­ing it will add to the thou­sands that the UNC es­ti­mates have lost their em­ploy in the last four years. In­d­hars­ingh called for the gov­ern­ment to ar­tic­u­late the state of the petro­chem­i­cal sec­tor and for greater trans­paren­cy.