Mosaic said decision on expansion at Faustina by year’s end

16 July 2013 22:09  [Source: ICIS news]

HOUSTON (ICIS)--Mosaic should make a final decision on its planned ammonia expansion project at the Faustina site in St. James parish, Louisiana before the year’s end, the fertilizer producer said on Tuesday.

Mosaic is still undergoing a very detailed front-end engineering program, which is now in the final stages, said chief financial officer Lawrence Stranghoener during a conference call on Q4 earnings. The decision also will be determined by weighing the anticipated capital expenses versus the long-term demand outlook for ammonia.

Initially estimated at $700m (€539m), Mosaic now believes the project will range between $1-1.2bn when plant costs and infrastructure improvements are final calculated. Previously, officials said the additional product, estimated at 1m tons (907,000 tonnes), could ended up at the fertilizer operations in Florida, which presently imports ammonia from sources like Trinidad and Russia.

“We are closely watching trends in supply and demand for ammonia longer term, supply and demand for natural gas longer term. We are making sure we understand all the cost of this project before we make a final decision,” said Stranghoener.

“Ultimately it's our interest to have more merchant ammonia available. So that will certainly be a factor that enters into our final decision. With respect to cost of the project, costs are creeping up on these projects, any projects of this sort. I think we benefit from being one of the ones that are much farther along in our project planning than others.”

Stranghoener said the company is aware of the spate of projects that have been announced but is not certain how many of those will actually come on line in the coming years. Announced in late 2012, the plant had originally been forecasted to start with construction sometime next year and have full operations running by early 2016.

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 = €0.77)

By: Mark Milam
+1 713 525 2653

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