Caribbean Nitrogen Company (CNC) expects lower profits due to higher costs and the shortage of natural gas. According to CEO Jerome Dookie, T&T is no longer an attractive location for investors in the petrochemical industry.
Dookie, who spoke during a media conference and tour of the Point Lisas plant yesterday, Dookie said while CNC’s parent company, Proman Group, of Germany, is not likely to make new investments in over the short to medium term, it will upgrade and maintain its current assets. He said there is not enough gas to meet overall demand, so it would be illogical for companies to be lining up to build new plants.
“I think that capital will always follow where investments return and in terms of new projects being built, Trinidad and Tobago is no longer an attractive destination because the feedstock availability is questionable and the pricing is higher. Certainly in the US now where there is shale gas, it is a preferred destination for capital, so for new construction projects here there is no sense of attractiveness in this jurisdiction,” Dookie said.
However, he added, given the number of assets and size of investments Proman has in T&T, there are opportunities to build on.
CNC was forced to shutdown last January when its gas supply contract with the NGC ended and the companies failed to reach a new agreement. Close to 400 employees were temporarily laid off. However, in April, a new agreement was finalised with CNC paying a higher price for its supply from NGC.
Dookie said this increase in cost will affect the company’s profitability but offered no further details.
The Proman Group operates 14 plants in T&T and employs more than 850 people.
From Monday, its Nitrogen 2000 Unlimited plant undergo a turnaround at a cost of $110 million.
The group is also undertaking its first upstream petrochemical project with construction of DeNovo Energy’s gas processing plant at Point Lisas Industrial Estate. DeNovo Energy operates Blocks 1(a) and 1(b) in the Gulf of Paria and first gas from its Iguana field is expected later this year.
Negotiations are ongoing for the gas supply as Government has not approved DeNovo Energy’s plan to sell directly to its sister company, Methanol Holdings Trinidad Ltd. (MHTL). T&T’s upstream companies are not allowed to sell gas directly to downstream producers and must sell to the National Gas Company.