Estonia's Nitrofert restarts ammonia and urea production

20 December 2012 14:12  [Source: ICIS news]

LONDON (ICIS)--An Estonia fertilizer plant idled for several years has restarted ammonia and urea production following the signing of a new Russian gas supply contract, it was confirmed on Thursday.

The Nitrofert plant at Kohtla-Jarve on the Baltic country’s north coast was shuttered four years ago due to weak demand for its products and high energy costs.

Production recommenced earlier this month after an agreement was reached with an unnamed natural gas producer from neighbouring Russia, an executive at sister company NF Trading said on Thursday.

According to Finland-headquartered NF Trading, which will market and sell Nitrofert's products, the plant is capable of producing 7,500 tonnes of ammonia and 18,000 tonnes of prilled urea a month. Alternatively, it can produce up to 11,000 tonnes of ammonia and 9,000 tonnes of prilled urea a month.

The first merchant ammonia produced at the plant since early 2008 will load at the nearby port of Sillamae in early 2013 when Koch Industries lifts 15,000 tonnes on 5 January for shipment to the US. The cargo is heard priced "above $600/tonne [€450/tonne] FOB [free on board]".

Other Baltic producers such as Acron and Uralchem concluded several ammonia spot sales at $620/tonne FOB for December loading, some of which will be combined with the Nitrofert product for Koch's 40,000-tonne shipment across the Atlantic.

As Baltic ammonia is normally priced around $10/tonne higher than the benchmark Black Sea price, the 15,000-tonne Nitrofert cargo was likely sold for between $610-620/tonne FOB, given January loadings in Yuzhny are priced at $600/tonne FOB.

($1 = €0.75)

By: Richard Ewing
+44 208 652 3214

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