Price and market trends: BASF, Yara mull US Gulf Coast ammonia plant

28 October 2013 00:00 Source:ICIS Chemical Business

Plans for a super world-scale plant in the Gulf are set to come in 2014

Germany-based chemical company BASF and Norwegian fertilizer major Yara International are evaluating a possible joint investment into a world scale ammonia plant on the US Gulf Coast.

“Additional details of the possible joint venture including the exact location for the plant as well as the capacity of the plant are currently being discussed by the parties,” BASF said in a statement.

Yara, meanwhile, is seeking to strengthen its presence in the US, according to BASF.

“BASF is currently a major user of ammonia for its US downstream manufacturing activities and intends to further strengthen its backward integration,” it added.

Senior executives of Yara said plans for a “world-scale or super world-scale” ammonia plant in the US Gulf involving BASF would become more concrete by mid-2014.

During a conference call held hours after initials details of the potential project were unveiled in a joint statement, Yara bosses said further information about the investment would be unveiled over the coming months.

“We are at a fairly advanced stage [of planning] and hope to be real concrete about this by mid-summer of next year,” said Yara president and CEO Jorgen Ole Haslestad, adding the coastal location means some of the plant could be built abroad and the parts then shipped to the, as yet undetermined, site.

“BASF does have a need for ammonia in the US Gulf so there would be a captive use and we would then sell the rest to the market. I’m not able to tell you how much ammonia BASF would take [for their downstream manufacturing activities] from the plant – which could be world-scale or super-world scale – but it what I can say is would be a quite considerable part of it.”

He added such an ammonia plant would likely not displace ammonia produced in Trinidad and Tobago by Yara and one of its joint ventures as the majority of that production is used for phosphate manufacturing in Florida.

By Richard Ewing and Nurluqman Suratman