28 March 2013 21:57 [Source: ICIS news]
HOUSTON (ICIS)—US fertilizer producer Mosaic on Thursday said the company should complete its front-end engineering design work on a planned ammonia expansion project at the Faustina site in St. James Parish, Louisiana in approximately 90 days.
Oficials now are expecting the project, initially projected as having a price tag of $700m (€546m), to cost between $1.0bn-1.2bn, but pointed out during a earnings report conference call that the increased facilities could produce up to 1m tons of additional ammonia.
Company president James Prokopanko said that once the engineering task is completed, Mosaic will make a final decision on the project, which is estimated to triple the amount of ammonia the company is producing at its current sites in Louisiana.
The additional product will likely end up at the company’s fertilizer operations in Florida, which presently imports ammonia from foreign sources such as Trinidad and Russia.
“That’s a lot of money. So once we have the final numbers, and that’s just our practice for major expansion like this, we like to have a high confidence in what the final cost is going to be before we make the final call,” said Prokopanko.
"There has been more to be seen on that. There has been a big gold rush mentality on nitrogen.”
Announced in late 2012, the plant had originally been scheduled to start construction sometime next year and have full operations running by early 2016, but this timeline very likely will be extended further as the decision and investment is weighed further.
It has been previously reported by ICIS that the state government has offered the company a tax credit that could be worth $3m to secure the facility.
“These are long lead-time projects. If we made a decision today, we expect it is going to be upwards of four years before we get the first ton of the project out considering all the permitting and construction cost,” Prokopanko said.
“A lot of things can change so looking at the final cost over the next few months gives a better sense of who is really serious about making these serious one billion dollar-plus investments and we will make the call later this summer.”
Currently Mosaic has two fertilizer units in Louisiana with the Faustina and Uncle Sam sites. Uncle Sam facility produces phosphoric acid and in turns supplies the Faustina plant, which creates granulated fertilizers.
($1 = €0.78)
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