25 July 2013 23:32 [Source: ICIS news]
HOUSTON (ICIS)--PotashCorp will perform turnarounds at its ammonia plants in Trinidad to counter an anticipated 40% cutback in natural gas during September while repairs are underway at the offshore supply platform, the Canada-based fertilizer producer said on Thursday.
The varying rates of gas supplies to the plants has already reduced output by 100,000 tons (91,000 tonnes), but PotashCorp is hopeful that the National Gas Company (NGC) is making improvements to the ongoing issue, company officials said during a Q2 earning conference call.
Currently, plants are reportedly operating under a 10-15% curtailment level, which is anticipated to remain stable throughout the end of summer.
“There are further curtailments planned for Q3, and we’re going to take down a couple of our plants to coincide to that. So we don’t quite feel the pain. We think year-over-year, it’s going to very similar,” said David Delaney, chief operating officer at PotashCorp.
“We are encouraged, though, that this upstream integrity program should be complete by the end of the year and have better utilisation from the upstream producers in 2014,” he added. “That’s what we’re being told.”
Delaney said besides maintenance on the platforms, the NGC is working on trying to enhance the transmission and distribution of gas, as well as create a system by which there would be a buffer supply.
“That’s their intent,” Delaney said. “We’re seeing more investment by some of the other producers, and there are some new producers coming online - some new production coming online in Q3, Q4 of 2014.”
PotashCorp said it will offset the decline for the year so far and the anticipated dip in September by sourcing from the Geismar facility in Louisiana.
“On the domestic side, we’ll be running at 100% for the remainder of 2013, having the new tonnage, and Geismar has been a real benefit to our domestic sales and most of that’s going into the UAN market,” said Brent Heimann, president of PotashCorp Nitrogen. “So the average in Trinidad on our largest plant, which will be about a month in September-October, will be full borne in the US.”
Gas supply issues have caused an ongoing decline in production of ammonia due to the series of reductions. The restriction in the available supply has ranged as low as 10% in recent months to as high as 40% in previous years.
Major operators in that region include PotashCorp, which has four ammonia plants, and Yara, which operates three plants. It is estimated that the 11 ammonia plants within the island nation have a total approximate capacity of 5.7m tonnes/year.
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