THE POINT Lisas Industrial Estate is not under severe threat, but is suffering from a “short-term stumbling block,” from which T&T will recover hopefully in the first quarter of next year.
So said Energy Minister Franklin Khan yesterday as he sought to address the prevailing gloom caused by the current environment.
He was speaking at yesterday’s post-Cabinet news conference, one day after Canadian fertiliser producer Nutrien announced the “indefinite closure” of one of its four ammonia plants.
Khan said : “Everybody will be making less profit in the (energy) chain. But in the long-term business, it is nothing unusual. Oil prices were $8 and $10 in the past and these big energy companies survived. Trinidad survived as an economy. So I want us to see this period as a short-term stumbling block to the energy sector. We have to be optimistic that it would pick back up. As to the time it would pick back up, that would depend on market conditions which we have no control over.”
He said Government was working assiduously to bring the Point Lisas situation into a “stable and acceptable solution despite the challenges being faced”.
Government doing nothing wrong
The Energy Minister emphasised that the Government was doing nothing wrong. The Government is trying its best through the natural gas value chain committee, chaired by Wendell Mottley, “which is meeting with all the players in the gas value chain,” Khan said. This Committee is receiving expert advice from a UK company, Gas Strategies, he said. Khan said T&T had “top ranking global players” involved in its energy sector such as Shell and BG. Atlantic LNG, BHP and EOG and MHTL continue to operate in Trinidad and Tobago, a point also made by National Security Minister Stuart Young, who like Khan is a member of the natural gas value chain committee.
Young advised people not to follow what the “naysayers” were saying. He said the multinationals such as Shell, BG and BHP continue to invest their limited global capital expenditure here.
He said even downstreamers were spending money upgrading their plants. “So all of this screaming, wishing the worst on Trinidad and Tobago by some of the naysayers, and we know who they are, saying the whole thing is about to collapse, is not true,” he said, adding: “What we are facing is the result of a global crash in terms of prices in this Covid period.”
Khan: “Everybody has to take a haircut
Khan said state-owned NGC has had to cut its margin significantly as an aggregator “sometimes to almost ground zero where there is no mark up and they are absorbing that cost in the interim to rally us through this period of low methanol and ammonia prices” He said everybody has had to take a haircut,” he said.
However he said “only yesterday” there was an agreement with MHTL to keep its plants operational, in the first instance, for three months until both parties negotiate a long-term contract for three to five years. He said the deal includes more gas for MHTL which they can use to restart the M2 plant which was idled a couple of months ago.
He said the M5000 plant was the world’s largest methanol plant and the most efficient plant on the Estate and therefore it was important to find solutions which would keep it operational in spite of extremely low commodity prices.
Khan said three of the world’s largest petrochemical plants which are operating in Point Lisas- MHTL, Nutrien and Methanex have indicated to the Government that they are in Trinidad and Tobago for the long haul. He said ammonia and methanol which were selling for US $250 to $300 per tonne a year ago, were now selling for as low as under $200 per metric tonne. He said the industrial market for ammonia had virtually disappeared while the market for methanol has halved.
Specific challenges to
Petrotrin/ Patriotic deal
With respect to the discussions between Petrotrin Holdings and Patriotic Energies and Techologies, Khan said there were “serious discussions proceeding in particular between the legal parties of both teams,”
He said Government expected a response in the next seven to nine days as to where the situation stands. He said Government was committed to the deal with Patriotic but he would be in a position to make a more definitive statement when the legal team reports.
“There are some specific challenges which we wouldn’t want to go public with. It is being handled by the attorneys of both parties,” he said.
Khan said no government has been as transparent as this one on energy matters. “For decades the energy industry operated like a secret society. Nothing was available to the public,” he said.
Saying that it was Prime Minister Dr Keith Rowley who insisted that the gas master plan be laid in Parliament, Khan said Government had continued to be open, save for the strictures imposed by commercial confidentiality clauses.
“And that sends the signal as to how open we are in other aspects of the economy,” he said,
Khan joined with Ministers Young and Symon De Nobriga in wishing the country a happy Republic Day.