BASF and Yara at work on Freeport Ammonia Project
The German-based chemical leader BASF and the Norwegian nitrogen fertilizers producer Yara International (Yara) have signed an agreement to build a world-scale ammonia plant on the US Gulf Coast.
With the largest agriculture in the world, USA is the most strategic market for fertilizers.
Anyway the agriculture is using three type of fertilizers:
– Nitrogen-based fertilizer such as ammonia and urea
– Potash
Depending on the nature of the fertilizers USA plays a different role.
In ammonia and urea, USA is the third world largest producer after China and India
For the phosphate, USA ranks second behind China while it has a second league position in potash after Canada, Russia and Belarus.
Despite its strong position in the nitrogen fertilizers production, USA stands as the largest importer of ammonia and urea.
These imports come for 70% from Canada and Trinidad.
As nitrogen fertilizers must be produced out of natural gas, and as long as USA has been the world largest importer of natural gas, it was more interesting for this country to import nitrogen fertilizers than to produce them locally.
But the development of the shale gas and the following glut of natural gas returned the situation in favor of a local production of ammonia and urea.
To benefit from the competitive gas prices in USA, series of ammonia and urea projects have been announced in US these last twelve months such as this BASF and Yara Freeport Ammonia greenfield plant.
BASF and Yara to make final decision on end 2014
BASF and Yara are both active in USA with different interests.
With large chemical plants in Geismar, Louisiana, Freeport and Port Arthur, Texas, BASF is one of the largest consumer of ammonia in USA as feedstock for its downstream activities such as adhesives, glues and plastics building blocks.
Established in 2004 as spun off from the Norwegian energy group Norsk Hydro, Yara is producing and trading nitrogen fertilizers all over the world, including USA.
Well known for its technology, Yara is proposing its hydrogen-synthesis process for higher efficiency.
In joining their respective competence in the Freeport Ammonia project, BASF will have access to ammonia in the optimum conditions while Yara will secure the future growth of its market in USA.
After comparing the construction costs in North America, BASF and Yara selected the BASF existing facilities on the Gulf Coast of USA to add this ammonia plant.
TheFreeport Ammonia project should have a capacity of 750,000 tonnes per year (t/y).
According to the last costs estimates performed during the feasibility study the BASF and Yara Freeport Ammonia Project should require $1 billion capital expenditure.
After choosing Freeport on the Texas Gulf Coast, BASF and Yara are expecting to make the final investment decision (FID) for their greenfield ammonia plant on second half 2014.
