Trinidad gas supply row heats up

Trinindad and Tobago's government has asked Caribbean Nitrogen Company (CNC) to resume talks with the National Gas Company (NGC) after the latter announced the expiration of a gas sales agreement with CNC.

"Whilst NGC and the government remain committed to supplying the downstream hydrocarbon players with gas, they will not be bullied by CNC," the energy ministry said in a statement.

The release highlights the country's gas supply restrictions, but adds that "there is no entitlement to gas supply without an agreed and executed contract."

According to energy minister Franklin Khan, the orignal contract expired in October and was extended twice.

At the local energy chamber's recent annual conference, Khan said: "The new reality is that low prices, which [were] obtained in previous years are no longer available. Therefore, greater emphasis has to be placed on the efficient and cost effective conversion of gas into petrochemical products."

"How can you invite us to the table and cut off our gas at the same time," CNC chief executive Jerome Dookie said in response to comment from NGC chairman Gerry Brooks.

"We have been negotiating in good faith to resolve this situation, and we have already come to the table willing to compromise. We will not be taken advantage of and accept terms and pricing that would result in CNC running its operations for a disproportionate part of an agreement at a significant loss," added Dookie.

On Wednesday, CNC, which has called for an independent audit of its relationship with NGC, reported that it shut down its ammonia plant at Point Lisas after NGC terminated gas supply.

"It's a very challenging time for ammonia plants at Point Lisas. They are facing low prices on the international market for ammonia," former Trinidad energy minister Kevin Ramnarine said during a broadcast on local television station CNC3 regarding the gas supply impasse.

"There are 10 contracts with other plants in Point Lisas that expire in 2018 and 2019," said Ramnarine.

Khan said at the energy chamber event that "this administration will do anything and everything to ensure the long-term viability of petrochemical production at Point Lisas. It was Point Lisas that put Trinidad and Tobago on the world energy map and we plan to keep it that way."

Ammonia production is the second largest gas offtaker in Trinidad after LNG, according to ministry data (see table below).

The Trinidad Guardian reported that the case was heading to the Court of Arbitration in the UK, and is due to be heard in the coming months.