Agricultural chemicals company Nutrien has shut down its Trinidad operations, affecting over 600 workers, following a breakdown in negotiations with the National Energy Corporation over port and pier facility fees that the state entity says were decades below market rates.
In a release National Energy attributed the shut down to their attempt to implement fair market rates for use of critical port infrastructure, ending what the corporation describes as “peppercorn legacy rates” that had cost Trinidad and Tobago citizens more than $500 million over the past five years.
National Energy’s Board revealed that upon assuming office, they discovered users of pier and port facilities had been paying subsidized rates “enjoyed for decades, to the economic disadvantage of National Energy.”
The corporation said some Pier User Agreements (PUAs) had expired with no meaningful attempts to renegotiate new terms, allowing companies to continue enjoying rates “far below market levels.”
In Nutrien’s case, when their 2006 PUA expired on December 31, 2020, the company demanded rates even lower than what they had paid for the previous 15 years, according to National Energy.
National Energy stated that they invoiced Nutrien and other users fair market rates after their respective agreements expired and while some users made good faith payments and entered negotiations, Nutrien demanded that the invoiced sum of USD $28 million be withdrawn as a precondition to any negotiation.
The corporation noted that for Nutrien specifically, the proposed increase in port and pier fees ranged from USD 2 cents to USD 2 dollars per metric ton of product—at a time when ammonia prices have reached approximately USD $545 per metric ton, the highest in five years.
According to the release, the National Energy Board held meetings with Nutrien management, where the company indicated it had been “contemplating shutting down their Trinidad operations for quite some time.” To avert the threatened shutdown, National Energy held an emergency meeting with Nutrien on Wednesday. At this meeting, the corporation agreed to permit Nutrien continued use of port and pier facilities until December 31, 2025, at the same legacy rates they had enjoyed for 19 years.
National Energy proposed that parties meet to negotiate a new PUA. This proposal was put in writing and disclosed to Justice Westmin James, before whom Nutrien had made an urgent application for an interim injunction “specifically for the purpose of accessing the pier facilities in order ‘to allow for shut down operations.'” Upon this disclosure to the court, Nutrien withdrew its legal application.
The National Energy Board said its proposal was made in good faith to provide a foundation for new terms and conditions, allowing Nutrien to continue operations, service customers, and retain employees.
However, this proposal was met with a demand by Nutrien that the National Gas Company (NGC) settle the issue of future gas supply to secure the overall economic viability of Nutrien—despite the company currently enjoying the benefit of an existing gas supply contract.
“Neither NGC nor National Energy has a responsibility to subsidise the operations of other companies to secure their economic viability,” the statement said.
National Energy said it 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.”
The corporation emphasized that responsibility for the shutdown cannot be ascribed to National Energy or NGC, noting that the decision will “adversely affect the lives of over 600 of their employees and their families.”
National Energy confirmed that the gas previously supplied to Nutrien is being reallocated to other downstream plants on the estate to minimize disruptions.
“While the NGC and National Energy regret the decision of Nutrien, we have a duty to secure the best interest of our country and its citizens,” the statement concluded. “NGC and National Energy will continue to support the growth and development of the Energy Sector and prudently manage the country’s assets to encourage investment and optimise returns to all stakeholders.”
The Board and Management of both NGC and National Energy stated they will continue working to ensure that disruptions from Nutrien’s decision are minimized.