Khan on Nutrien plant closure: T&T feeling COVID-19 effect
Photo: Minister of Energy and Energy Industries, Franklin Khan. Photo: Office of the Prime Minister/Facebook.
Minister of Energy and Energy Industries Franklin Khan said Trinidad and Tobago’s energy industry is feeling the effects of the COVID-19 pandemic.
Speaking at today's post-Cabinet media briefing, Khan issued an update following an announcement by Nutrien that it would be closing one of four ammonia plants in Trinidad, resulting in a 15 percent cut to its workforce.
He acknowledged the closure of several plants at the Point Lisas Estate but said once market conditions improve next year, these plants are expected to restart.
Khan said in light of current market conditions ‘everybody has to take a haircut’:
‘We are experiencing what we call the COVID-19 effect of petrochemical prices. Ammonia and methanol are significantly and in some cases approaching under US$ 200 per metric tonne. Those same commodities were selling at US$250 to US$300 per metric tonne one year ago.
‘It is difficult to survive in an environment like that especially as the market has dwindled. The industrial market for ammonia has virtually disappeared; the market for methanol has been halved so there is a surplus of supply.’
Khan said government has received commitments from major energy investors that they ‘are in Trinidad for the long haul.’
‘It is hoped that in the first quarter of next year we can see a pick-up on it. Everybody has to take a haircut. In the context of the entire value chain, the upstreamers have already taken a haircut.’
‘Once we get an upturn in the prices…we expect to see the restarting of some of these plants.’
Khan thanked stakeholders who continue to ‘rally to the cause’.
‘Government is trying its best through its gas value chain committee…we are meeting with all the players in the gas value chain.’
He said they are being guided by the advice of Gas Strategies, a UK-based firm.
In a statement issued September 22, Nutrien said the Trinidad plant would be closed indefinitely, in response to ‘market conditions and lower global prices for ammonia’.
Nutrien said pressure to close the plant means a 15 percent reduction in its workforce effective from October 30, 2020.
The company said two of its ammonia plants and the associated urea facility will continue to operate at maximum capacity.
The company said its other plant, which was taken offline in May 2020 due to market conditions, is expected to come back online as market conditions improve.
It added that the urea plant at the site will continue operating at normal rate.
The company said: ‘These changes will enable the facility to operate more efficiently, competitively and sustainably into the future. Ensuring our customers are serviced is always a top priority. We are optimizing to ensure we support our customers and there are no changes to existing supplier contractual agreements.’