The Caribbean Nitrogen Company (CNC) has hit back at the National Gas Company, saying despite its attempts to enter into “good faith” negotiations with the state natural gas distributor, it could not accept NGC’s final offer for a long-term gas supply agreement because it would have made the company uncompetitive on the international ammonia market.
After intense negotiations overt the past ten months, CNC’s chief executive officer, Jerome Dookie, said in a release yesterday, and despite “several proposals, compromises and extensive best efforts,” NGC’s offer would have put the plant in a negative financial position.
“If CNC is not competitive, the business would not be sustainable and operations in TT would come to an end,” Dookie said.
Five days have passed since the CNC shut down its Point Lisas plant after the NGC shut off its gas supply. The company employs close to 400 people, who now stand to lose their jobs if the company cannot continue its operations. If that happens it will be the second major shutdown to happen in the Point Lisas Industrial Estate, after Arcelor Mittal closed its plant in March 2016, leaving its 600 workers jobless.
“This is clearly not a desirable outcome for a company that has invested billions of US dollars in infrastructure, plants and people and has been a key driver in the development of TT’s petrochemical business,” Dookie said.
The company also defended its position, after the NGC and the Ministry of Finance both accused CNC of trying to undercut NGC, asking for a gas supply below market price, especially during a time of gas curtailments. CNC sought to clarify what it said was “misinformation.”
The company insisted it did not choose to turn off its plant, because it is “a costly exercise where no one wins.”
Natural Gas prices on the New York Mercantile Exchange are US$3.55/mmbtu. CNC said its competition in the US pays below US$3/mmbtu. The company said it was willing to pay above US$4/mmbtu for gas from the NGC.
Government has distanced itself from the situation, with Prime Minister Dr Keith Rowley and Energy Minister Franklin Khan both saying in Parliament on Friday that there was no need for them to intervene. NGC did not immediately respond to Newsday’s request for comment, instead directing the paper to its latest release on Friday.