11 June 2013 23:28 [Source: ICIS news]
HOUSTON (ICIS)--As the producer who could bring the first additional capacity online, CF Industries (CF) said on Tuesday that it is steadily moving forward with its $3.8bn (€2.85bn) expansion projects in Iowa and Louisiana.
CF officials said during an investor conference call that as of April, it has committed $500m to the two projects, with a goal to start construction by this summer and production underway by 2016.
Currently, both projects are awaiting approval of the air permits need for both plants, but officials said the long-lead time rotating and high-pressure equipment needed for ammonia and urea operations have been ordered.
“We have submitted permit applications to both the states of Iowa and Louisiana, and that process has been accepted by both regulatory agencies at the state level, and they have basically issued draft permits, which are out in the public domain for comment,” said Tony Will, CF senior vice president.
“Our new projects are really underpinned by strong industry fundamentals, and they will have some pretty significant improvements to our product flexibility and our ability to both serve our domestic customers as well as export if, and when, the opportunity is attractive to us.”
Will said the flexibility will come in both urea and UAN and allow the company to deliver a significant amount of new production to farmers at a lower overall cost.
At $2.1 bn, the project at Donaldson, Louisiana, is being billed as the world’s largest nitrogen facility and will eventually have six ammonia plants, five urea plants and three UAN facilities. Additionally, the operation will encompass two deep water docks for ocean vessel loading and three floating docks to load river barges.
The Port Neal project in Iowa is estimated at $1.7 bn and is anticipated to have an eventually capacity of 849,000 tons of ammonia and 1.35 million tons of urea. Pointing out that the facility will bring expanded capacity to the heart of the key corn growing region, CF said the facility will have two ammonia and nitric acid plants and three committed to urea as well as UAN production.
CF Chairman Steve Wilson said while there is considerable upside these projects do not come without some risk in terms of investment and commitment to a longterm outlook, that is positive for crop nutrients and overall future demand.
“We have had very favourable interaction with the major equipment suppliers, and we have actually increased our confidence since we began executing the projects. We do have a great experience base that supports that confidence,” said Wilson.
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