CF Industries to Acquire Waggaman Ammonia Production Facility in the US
- 28-Mar-2023 4:37 PM
- Journalist: Kim Chul Son
US: CF Industries Holdings, a leader in the production of Hydrogen and Nitrogen products, has announced a definitive purchase agreement with Incitec Pivot Limited (IPL) for IPL's Ammonia production complex located in Waggaman, Louisiana. The complex is set to be a major step forward for CF Industries, as they continue to expand their operations as a global manufacturer.
CF Industries has agreed to purchase the Waggaman Ammonia plant and related assets for $1.675 billion. As part of the agreement, the companies have also allocated approximately $425 million towards a long-term Ammonia supply contract. Under this contract, CF Industries will provide up to 200,000 tonnes of Ammonia annually to IPL’s Dyno Nobel subsidiary.
CF Industries has announced that it expects to fund the remaining $1.25 billion of the purchase price with cash on hand. This move has been unanimously approved by the boards of directors of both companies, pending receipt of necessary regulatory approvals and other customary closing conditions.
Cornerstone Chemical Company's Waggaman Ammonia Production Complex can produce up to 880,000 tonnes of Ammonia each year. This production is divided among three customers, with the majority being used in industrial applications. Dyno Nobel is one of the main beneficiaries of this complex, receiving approximately 75% of the production.
In October 2016, a 38,500-tonne Ammonia storage tank facility was commissioned in Jefferson Parish on the Mississippi River, offering a range of transport options for low-carbon Ammonia exports - including NuStar Pipeline, barge, truck and rail. The site is located just 60 miles southeast of CF Industries’ Donaldsonville Complex, providing an ideal base from which to deliver overseas shipments.
CF Industries announced that their plant is expected to generate a gross margin per tonne in line with its existing Ammonia segment before synergies. The company is determined to capture greater capacity utilisation, operational efficiencies and logistics optimisation.
CF Industries has announced an accelerated timeline for implementing carbon capture and sequestration (CCS) at one of its sites. The company is looking to increase low-carbon Ammonia production capability, in turn supporting Louisiana's and the nation's climate goals, while also earning 45Q tax credits for carbon dioxide sequestration.
CF Industries and Lotte Chemical Corporation have entered a partnership to further their research on producing clean Ammonia in the US. The MoU between the two companies outlines plans for long-term delivery of Ammonia to South Korea. This agreement is scheduled to go into effect from February 2023.
