The gas supply impasse between Caribbean Nitrogen Company (CNC) and the National Gas Company (NGC) took a downward spiral yesterday after the Energy Ministry warned CNC that it will not be bullied to act in a detrimental manner to the people of T&T.
Accusing CNC of “petulant and threatening behaviour,” the Ministry said “it noted with a high level of concern the language being used by CNC in its public utterances with respect to the breakdown of commercial negotiations (with NGC).”
CNC announced on Wednesday that its anhydrous ammonia plant at the Point Lisas Industrial Estate had to be shut down because NGC failed to supply gas. This resulted in the termination of 110 permanent workers and over 300 workers indirectly connected with CNC’s operations.
But the Ministry in a statement yesterday said, “It is no secret that there have been, and are, gas curtailment issues currently affecting our hydrocarbon industry.”
“ It is also not a secret that NGC from 2019 has to pay significantly higher prices for gas. The behaviour of CNC which has shareholders who hold significant shareholding in other plants in Point Lisas is instructive and disappointing,” the Ministry said.
Saying there is no entitlement to gas supply without an agreed and executed contract, the Ministry said, “It is the Government’s understanding that NGC’s gas supply agreement with CNC expired and the parties were unable to agree pricing issues for gas supply from 2018 to 2023.”
“The gas supply situation and in particular, the pricing of gas has changed significantly and the Government has been, and will be, engaging upstream gas suppliers and downstream gas purchasers to address this,” the Ministry added.
Whilst NGC and the Government remain committed to supplying the downstream hydrocarbon players with gas, the Ministry said “it will not be bullied by CNC, its affiliates or anyone for that matter, to act in a manner that is detrimental to NGC and ultimately the citizens of T&T.”
“Transfer pricing and avoidance of tax issues have long been a part of the behaviour of some in the industry and these are also issues being looked at by the Government. The Government encourages CNC to stop its petulant and threatening behaviour and return to the table of negotiations with NGC.”
On Thursday, NGC chairman Gerry Brooks also appealed to CNC’s management to let good sense prevail and to reconsider its latest offer. Brooks said since the agreement between both companies expired in October 2017 the NGC had facilitated four extensions of the contract with CNC.
But CNC’s Chief executive officer Jerome Dookie said NGC was continuing to make misleading statements.
“We do not agree with Mr. Brooks’ position and completely reject his statements that accuse CNC of having unreasonable expectations, double digit returns and the potential for billions of dollars of losses for the NGC,” Dookie said. He also questioned how can NGC could invite CNC to return to the negotiating table yet cut off the company’s gas supply at the same time.