PORT OF SPAIN, Trinidad, CMC – The Canadian-based world’s top potash producer, Nutrien, shut down its operations here on Thursday, even as last-minute negotiations to prevent the action failed, resulting in 600 workers being sent home.
“Nutrien has safely shut down its nitrogen operations in Trinidad and Tobago. We remain committed to constructive engagement with stakeholders. However, we have not reached a solution that would allow us to restart operations under viable economic conditions.
“These challenges include US$28 million in unilateral and retroactive port access fees, as well as the absence of a reliable and economically sustainable natural gas supply,” the company stated.”
Earlier this week, Nutrien announced that it had started a controlled shutdown of its Trinidad nitrogen operations at the Point Lisas facility.
It cited port access restrictions imposed by the National Energy Corporation of Trinidad and Tobago (National Energy) and a lack of reliable, economic natural gas supply, which has reduced the free cash flow for the operations over time, and that it will continue discussions with stakeholders and assess options for its other operations in Trinidad.
Nutrien’s vice-president and managing director, Edmond Thompson, in an internal memo to workers, said that the discussions with National Energy had not resulted in a workable agreement.
“ We had hoped for a more productive outcome; however, we have not reached an economically viable solution that would allow us to restart operations,” Thompson wrote. “The key issues remain unresolved.
“The millions of dollars of retroactive and unilaterally imposed fees have not been rescinded, and the overall economic viability of operations has not been addressed. We recognize that this situation is difficult.”
But National Energy, in a statement, distanced itself from the decision of the Canadian company to shut down its operations here, insisting the decision “is not one for which any responsibility can be ascribed to National Energy or NGC (National Gas Company)”.
The company said that when current officials assumed office, they found several expired or neglected Pier User Agreements that allowed companies, including Nutrien, to pay “peppercorn legacy rates” for years, costing taxpayers over TT$500 million (one TT dollar = 0.16 cents). It said Nutrien’s 2006 agreement expired in December 2020, yet the company “demanded a rate lower than that which they enjoyed for the previous 15 years”.
National Energy said it proposed new port and pier fees ranging “from US$0.02 to US$2.00 per metric ton of product,” at a time when ammonia prices were approximately US$545 per metric ton.
National Energy said its board of directors made its proposal “in good faith to provide the parties with a suitable foundation to engage in and agree upon new terms and conditions, thereby allowing Nutrien to continue operations, service its customers and retain its employees”.
But it said this proposal “was met with a demand by Nutrien that NGC settle the issue of future gas supply, to secure the overall economic viability of Nutrien, even though Nutrien currently enjoys the benefit of an existing gas supply contract”.
It said Nutrien “demanded that the invoiced sum of US$28 million be withdrawn as a precondition to any negotiation” while threatening to shut down operations and blame it publicly. To avert that, National Energy said it allowed the company to continue using port facilities at legacy rates until December 2025 while pursuing a new agreement.
Neither NGC nor National Energy has a responsibility to subsidize other companies’ operations to secure their economic viability.
“National Energy is satisfied that it has taken all reasonable steps to support the continued operations of Nutrien, whilst at the same time fulfilling its mandate to seek the best interest of the citizens of our country, including the employees of Nutrien.”
Earlier, Energy and Energy Industries Minister Dr. Roodal Moonilal said that the new government, which came into office following the April 28 general elections this year, is now involved in discussions with Nutrien “concerning port restrictions and port access, and I expect that this matter will continue to occupy our attention”.
Nutrient produces roughly 85,000 tonnes of ammonia and 55,000 tonnes of urea per month through its operations in Trinidad and Tobago, and the company said it expects to remain within its 2025 annual nitrogen sales outlook of 10.7 million to 11.2 million tonnes, supported by strong performance at its North American operations.
Nutrien Ltd. is a global provider of crop inputs and services. In a previous instance, Nutrien had also taken an ammonia plant offline in May 2020 due to market conditions.
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