PORT OF SPAIN, Trinidad - The state-owned National Gas Company of Trinidad and Tobago Limited (NGC) Tuesday said the decision of the Canadian-based Methanex Corporation to indefinitely idle its Titan plant here stems primarily from disagreement over gas pricing rather than supply availability.
In a statement, the NGC said that it has taken note of the statement regarding Methanex’s decision to indefinitely idle its Titan plant and wishes to place in proper context the facts surrounding this decision.
“NGC remains committed to supporting the long-term sustainability and competitiveness of Trinidad and Tobago’s petrochemical sector and values its longstanding relationship with Methanex. Throughout the negotiations, NGC engaged constructively and in good faith with the objective of reaching a commercially viable agreement that balanced the interests of both parties.
“During the negotiations, gas supply volumes were not the issue. NGC offered Methanex the same contracted gas volume provided under the expiring Gas Sales Contract and indicated its willingness to consider an increase in volume if required. However, Methanex advised that the principal consideration was the commercial pricing arrangement.”
Methanex Corporation in its statement had said that it would be indefinitely idling its Titan methanol plant in Pt Lisas, a major industrial centre along the west coast of Trinidad, giving as a reason the failure to reach a new natural gas contract.
“Methanex Corporation announced today that it has been unable to agree to a new natural gas contract for its Titan methanol plant in Trinidad and Tobago (860,000 tonnes per year capacity) and, as a result, will begin the process of indefinitely idling the facility,” the company said in a statement, adding that the existing natural gas contract expires in September.
The company, which employs more than 100 people, said it “will undertake a preservation process at the Titan plant to provide optionality for a future restart should conditions materially improve”.
President and chief executive officer of Methanex Corporation, Rich Sumner said the company has had “a long history in Trinidad and Tobago with an outstanding organisation that has played an important role in our company’s history.
“This difficult decision reflects our focus on preserving long-term shareholder value in a challenging environment where the structurally tight gas supply and demand balances in Trinidad and Tobago are making operations commercially unviable.”
“Ahead of this decision, we engaged extensively with the government of Trinidad and Tobago and the National Gas Company of Trinidad and Tobago (NGC), and we recognise and appreciate their ongoing efforts to address the country’s gas supply challenges.
“We will monitor future developments closely, with a view to reassessing conditions and our position over the coming years. We are now focused on supporting our team members during this challenging period and safely idling and preserving the facility.”
Methanex is the world’s largest supplier of methanol globally. It had idled its Atlas methanol plant in September 2024 and restarted operations at its smaller Titan methanol plant due to a lack of gas.
But in its statement, NGC said that the key issue, therefore, is related to the price of gas, adding that “Methanex sought a gas price that was significantly lower than that contained in the expiring Gas Sales Contract.
“The requested price was also below NGC’s acquisition cost of gas and below the rates applied to NGC’s Light Industrial and Commercial customers, as well as to companies within The NGC Group. Methanex indicated to NGC that a reduced gas price was the only economical way of continuing its operations.”
NGC said that given its responsibility to operate on a commercially sustainable basis and to maximise value from Trinidad and Tobago’s natural gas resources, “the Company was not in a position to agree to a price below its acquisition cost.
“Such an arrangement would not have been consistent with NGC’s commercial obligations or its responsibility to all customers, stakeholders and most importantly, its shareholder – the citizens of Trinidad and Tobago.
“Notwithstanding these challenges, NGC sought to bridge the gap between the parties. The Company revised its pricing proposals on more than one occasion and was also prepared to maintain the pricing under the expiring contract for an interim period – until the end of the year – while discussions continued. These options, however, did not align with Methanex’s commercial requirements, as the company maintained that a new agreement would only be possible at its proposed price.”
NGC said that while the parties were ultimately unable to reach agreement, it respects Methanex’s commercial decisions and appreciates the many years of partnership between the two companies.
“NGC remains open to continued dialogue should opportunities arise to reach a commercially sustainable arrangement that reflects the interests of both parties.
“Methanex indicated in its release that its decision reflected their focus on ‘preserving long-term shareholder value in a challenging environment’. NGC has acted and will continue to act to also preserve shareholder value on behalf of the citizens of the Republic of Trinidad and Tobago.
“As Trinidad and Tobago’s energy sector continues to evolve, NGC remains committed to working collaboratively with all its customers to support investment, strengthen the downstream industry and maximise value from the country’s natural gas resources for the benefit of the people of Trinidad and Tobago,” the state-owned company said.
Earlier, the Energy Chamber of Trinidad and Tobago said the decision of foreign owned companies within the energy sector to shut down their operations in recent times will have an impact on the country’s foreign exchange earnings.
In a statement the Energy Chamber said Methanex has been a “valued long-term investor in this country”, and its operations here have “ made a meaningful contribution to Trinidad and Tobago’s export earnings and the vitality of the Point Lisas Industrial Estate”.
The Energy Chamber said that it has taken note the company had “engaged extensively with the government of Trinidad and Tobago and the National Gas Company ahead of this decision, and we recognise the genuine efforts of all parties to seek a workable path forward.
“The Chamber looks forward to continued engagement between all parties with a view to creating the conditions that would allow these facilities to resume operations. We note that Methanex has preserved both plants in a state that provides optionality for a future restart, and we welcome that commitment. “
The Energy Chamber said it “remains available to support any constructive process that advances the long-term viability of the petrochemical sector in Trinidad and Tobago,” noting also that the decision by the Canadian company follows the shutdown of operations at the Nutrien facilities, where ammonia and urea were produced and exported.
“The shutdown of these facilities has weakened Trinidad and Tobago’s exports of these products and will have an impact on the country’s foreign exchange earnings. Beyond the direct workforce at these plants, the Chamber is mindful that a significant number of its member companies, local contractors and service providers who support operations across the Point Lisas Industrial Estate, will also feel the effects of these closures.
“The Energy Chamber remains committed to working collaboratively to ensure the long-term development of a competitive and sustainable energy sector in Trinidad and Tobago.”
