THE NATIONAL Gas Company has signed a three-year contract with Tringen, which has two ammonia plants partly owned by ammonia giants, Yara International.
The deal will ensure that the two plants would continue their operations, keeping Trinidad and Tobago as a main exporter of ammonia.
While the contract is for three years, it will end in 2023, along with all other energy contracts, but it will have a retroactive period to make up for the negotiation time.
NGC president Mark Loquan and Minister of Energy Stuart Young thanked the negotiation teams for their work in seeing a resolution of the deal.
Answering questions from the media, Loquan said while a three-year contract would be short-term, the NGC would take a deal for as long a period as it can get it.
“We recognise that for the downstream (industries), they have investments in turnaround, and a turnaround cycle is four years on average. For someone to make investments in turnaround, depending on what year that investment falls in, you need to extend it as best as you can, and that would be the aim.”
Young said while all government contracts would end in 2023, government took the position that it could not wait until then to start negotiations. He added that a three-year contract, while not ideal, was what was available.
He noted that an assurance of an uninterrupted supply of natural gas was one of the factors discussed when considering the length of contracts.
“One of the first things I did, over these past few weeks, is give notice to upstreamers that conversations for future gas deals need to start now. Part of that conversation is the length of gas-supply contracts.
"We would like to push for as far a contract as possible into the future, to give us a longer line of sight. But that is still in its infancy, and depends on projects coming online. Certainly we don’t want three-year contracts in the future, but we have to face the realities as we step forward.”
Magnus Ankarstrand. president of Clean Ammonia – Yara International, said securing the gas deal was an important element in secruring the future for TT and by extension Tringen.
“There is no doubt that the last year has been challenging in terms of gas supplies and the unpredictability of gas supply, which is important for an ammonia producer like ourselves. We have full confidence that the NGC is working diligently in resolving that situation and that confidence has been strengthened through this process.”