By Dominic Chopping
Norwegian fertilizer producer Yara ASA (YAR.OS) and German
chemical group BASF (BAS.XE) have Thursday agreed to build an
ammonia plant at BASF's site in Freeport, Texas as the companies
look to increase their footprint and take advantage of attractive
raw material costs in the U.S.
Yara said total capital investment for the plant is seen at $600
million, but it will in addition build an ammonia tank at the BASF
terminal bringing Yara's total investment to $490 million. BASF
will in also upgrade its current terminal and pipeline assets.
The plant will use hydrogen as raw material, reducing capital
expenditure, maintenance and carbon dioxide emissions.
The plant will be 68% owned by Yara and 32% by BASF and will
have a capacity of about 750,000 metric tons per year.
A long-term supply agreement for nitrogen and hydrogen has been
signed with Praxair Inc, linking the feedstock variable cost to the
advantageous natural gas prices available at the U.S. Gulf
coast.
Yara will manage construction of the plant while BASF will
operate the plant and the export terminal.
The plant is expected to be completed by the end of 2017.
Write to Dominic Chopping at dominic.chopping@dowjones.com
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