Sunday 15 December, 2019

Gov’t will not intervene in Yara-NGC matter

Photo via Yara International.

Photo via Yara International.

Government has no intention of intervening in any commercial matter.

This, as Yara on Wednesday announced its decision to shutter its ammonia plant at the Point Lisas Industrial Estate.

Responding to an urgent question during a sitting of the House of Representatives on Friday, Energy Minister Franklin Khan said Government will not be getting involved in the matter between Yara and the NGC.

He took note of the operator’s decision to cease operations in Trinidad and mothball the ammonia plant, which Yara advised is no longer viable.

Khan also noted that operations were affected by other challenges including market conditions, gas prices and outdated infrastructure.

“They have advised that the operation of the plant is not viable, based on its current cost structure, the market conditions for ammonia, the new gas prices, and probably most importantly, plant inefficiency, and also the fact that this plant is the most inefficient plant on the entire estate.

It is 50 years old and the last upgrade was done 20 years ago.”

He noted that 60 workers employed by the Yara plant will be impacted by its closure, but efforts are being made to have these individuals reemployed elsewhere in the business.

Khan explained that Yara, which is the operator of the TrinGen 1 and 2 plants owned 41 percent by Yara and 51 percent by NEL, intends to absorb as many of those 60 workers as is possible, so the full liability will not be 60.

Asked whether he was suggesting that facility should be closed because of its age, he said he was only “outlining the factual bases on which the decision was made”.

“That’s a decision for the owners of the plant… I cannot close the Yara plant. It is only the owners of Yara who can so do.”

The Minister addressed claims from the Opposition that the challenges within the gas sector stem from Government mismanagement, stating that it was the previous administration which failed to properly manage the sector and its resources.

“The real issue is that the challenge facing the gas sector which we have brought sanity to and we have partially and leading to full resolution is that the UNC went to sleep between 2011 and 2015.

They failed to renegotiate upstream gas purchasing contracts – all of which were expiring between 2016, 2017 and 2018. These contracts have to be renegotiated years in advance. They also failed to renegotiate gas sales agreements with downstream operations at Point Lisas, that led to $4.0 billion in claims toward NGC.”

“We have virtually sorted all that out,” Khan said.

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