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.”