20 January 2012 11:03 [Source: ICIS news]
Correction: In the ICIS news story headlined “Russia’s EuroChem acquires natural gas producer” dated 20 January 2012, please read in the second paragraph … The transaction value on a cash-free, debt-free basis is approximately $403m … instead of … debt-free basis is approximately $403bn … A corrected story follows.
LONDON (ICIS)--Russian nitrogen fertilizer producer EuroChem has completed the acquisition of 100% of the share capital of Severneft-Urengoy, a Siberian natural gas producer, the company said on Friday.
The transaction value on a cash-free, debt-free basis is approximately $403m (€310m), EuroChem said in a statement.
Severneft-Urengoy has an annual production capacity of around 1.1bn cubic metres (cbm) of natural gas and 220,000 tonnes of gas condensate. Total proven and probably gas reserves are 50bn cbm.
The current natural gas production capacity represents up to 25% of EuroChem’s annual gas consumption, the company said.
“The idea of partially back-integrating into natural gas production has been in the pipeline for some time. This is a very unusual move by a nitrogen fertilizer producer, but it will counter the effects of rising natural gas costs in Russia by providing a boost to our ammonia efficiency and strengthen our cost advantages,” said EuroChem CEO Dmitry Strezhnev.
EuroChem converts natural gas into ammonia, which is the primary raw material for its nitrogen based fertilizer production.
The company produces nitrogen fertilizers at Novomoskovsky Azot and Nevinnomysskiy Azot in Russia.
($1 = €0.77)
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