Minister of Energy and Energy Industries Franklin Khan,
By Sue-Ann Wayow
THE Point Lisas Industrial Estate is not under severe threat says Energy Minister Franklin Khan.
Khan speaking during a post Cabinet press briefing on Wednesday said, “While certain challenges exists, I think to say under severe threat is a misnomer.”
On Tuesday, Canadian-based petrochemical company Nutrien announced the indefinite closure of one of its four ammonia plants in Trinidad which will result in a reduction of 15 per cent of the workforce effective October 30.
Khan said energy companies were all feeling the brunt of Covid-19 and described this period as a “short term stumbling block to the energy sector” with major international companies committing to continue investing in Trinidad and Tobago.
However, he said given the negative impact globally by the virus, only efficient and cost effective plants can remain operational at this time.
Khan said that particular plant operated by Nutrien was the oldest of the four plants and also the least efficient.
He said, “Some of the least efficient smaller old plants could get displaced. The Point Lisas Industrial Estate will be protected to actually 75 to 80 per cent of its current capacity.”
The minister also announced that on Tuesday, the National Gas Company (NGC) and Methanol Holdings Trinidad Limited (MHTL) agreed to have the M5000 plant operational.
Khan said, “In the first instance for three months going to the end of this year, as we continue to negotiate a long-term contract for three to five years. That deal includes more gas for MHTL in which they can use to start the M2 plant that was also idle a couple months ago.”
“The M5000 is the world’s largest methanol plant, and the most efficient plant at the estate and it is important that we find solutions to keep it operational in spite of extremely low commodity prices,” he added.
Khan said, “We are experiencing what you call the Covid effect of the petrochemical prices. Ammonia and methanol are significantly in some cases sometimes approaching under US $200 per metric tonne. Those same commodities were selling between $250 to $300 a metric tonne one year ago. It is difficult to survive in an environment like that especially as the market has dwindled. The market for ammonia has virtually disappeared. The market for methanol has been halved so there is a surplus of supply on the international market and it is only very efficient and cost-effective plants can continue to remain operational.”
Khan said once prices start going in an upward direction, some of those plants should be restarted and that everyone in the gas value chain, upstream , midstream and downstream was working together to persevere through this period.
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