Trinidad and Tobago (T&T) have for years been a major exporter of ammonia to the United States. Trinidad and Tobago has also been a major supplier to the U.S. of LNG, but U.S. natural gas prices have T&T looking for other export opportunities in countries that do not already have the benefit of low cost domestic natgas supplies.
LNG exports to the United States have fallen dramatically over the past few years in tandem with increases in U.S. natgas production and as T&T looks to diversify its export portfolio, LNG sendouts to the U.S. will continue to decline. Spot market transactions in Asia, the E.U. and South America have allowed T&T to reach out across the global market and that now includes LNG sendouts to Argentina and Chile.
Meanwhile, ammonia prices, largely dependent on T&T natural gas production, have been subject to fluctuations based on natgas pricing and supply features in that nation. If Trinidad & Tobago look to capitalize on strong natgas and LNG production in markets offering a higher price than the U.S., ammonia production in Trinidad may begin to fall off.
I have written before about the influence of Venezuela over Trinidad & Tobago, and a popular Latin American book titled, 'The Open Veins of Latin America'. Hugo Chavez himself gave a copy to Barak Obama early in Obama's presidency. The book details oppression and misdeeds against Caribbean and Latin peoples at the hands of European colonizers across history and if exporters in Trinidad & Tobago have read the book, they may take it as a matter of national pride to find markets outside the United States.
The mitigating factor here for U.S. ammonia pricing will be domestic nitrogen production in the United States which is expected to nearly double over the next few years. The timing could not be better for increasing U.S. nitrogen production, specifically anhydrous ammonia. If Trinidad & Tobago finds new customers willing to pay a higher price than U.S. importers for natural gas products, sendouts to the U.S. Will continue to decline, and more T&T natgas will be used in LNG production.
As competition heats up for Trinidad & Tobago's natural gas, exporters there will continue to pass on sendouts to the U.S. as other countries are willing to pay more. With U.S. corn futures suppressing fertilizer prices, the same could be true of ammonia. T&T will continue to service North American ammonia demand as long as suppliers are willing to pay the sendout price, but as T&T exporters look to broaden their reach, the same market forces that have sent T&T LNG into new markets could do the same for ammonia, inflating the import price here in the United States.