On page 13, Kelleher lays out the arguments that best explain why I judge some projects to be “unlikely“: CF has first mover advantages, cheap debt, and (with the new Mosaic agreement) low risk on future cash flows. (They’re already talking about securitization of the Mosaic contract or, as they put it on page 10, alternative financing structures to optimize the cost of capital.)
There are no new data on the brownfield projects, as far as this website is concerned, but I like construction site photos.
It is interesting that their worst case scenario — $5 gas and $300 urea — has an internal rate of return of 14%. Given that US Gulf pricing is already close to $300 per ton of urea, and domestic supply will expand by unknown millions of tons over the next few years, one wonders how sensitive the project’s economics become beyond these levels.
Download the full presentation from CF Industries [PDF]