Freeport, TX — Yara/BASF

UPDATED: 07/31/2018 — see Change Log

OWNER: Yara Freeport LLC DBA Texas Ammonia (Yara / BASF joint venture)
PROJECT: Brownfield ammonia plant[memberful does_not_have_subscription=”1314-ammonia-industry-annual-subscription,1311-ammonia-industry-monthly-subscription,3338-ammonia-industry-30-day-subscription”]

COST (reported): $600 million
JOB CREATION (reported): 35 permanent, 550 construction
START-UP DATE (reported): 2018

Ammonia 750,000 mtpy [Membership required] [Membership required]
Units: stpd, stpy, mtpd, mtpy = short/metric tons per day/year.
[1] United States Geological Survey (USGS) Mineral Yearbook, Nitrogen gives capacity in metric tons per year, calculated as “engineering design capacity adjusted for 340 days per year of effective production capability,” rounded to three significant digits. Source: most recent year, Table 4: Domestic Producers of Ammonia,
[2] Company announcements. Sources: linked below.
[3] [Membership required]. Sources: linked below.
[4] [Membership required]. See Methodology.


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In April 2018, Yara announced that the Freeport ammonia plant was operational. Start-up was delayed from the original 2017 target, in part by Hurricane Harvey. Yara and BASF held a groundbreaking ceremony in July 2015, five months after the companies confirmed their investment decision and announced details of their joint venture relationship, the EPC contract award, and a 20-year feedstock supply contract.

COST: $682 million (originally $750 million)
JOB CREATION: 35 permanent, 550 construction
START-UP DATE: Q2 2018, originally Q4 2017
LIKELIHOOD: Done — see Methodology

Ammonia 2,200 mtpd
750,000 mtpy
None given 803,000 mtpy
Units: stpd, stpy, mtpd, mtpy = short/metric tons per day/year.
[1] United States Geological Survey (USGS) Mineral Yearbook, Nitrogen gives capacity in metric tons per year, calculated as “engineering design capacity adjusted for 340 days per year of effective production capability,” rounded to three significant digits. Source: most recent year, Table 4: Domestic Producers of Ammonia,
[2] Company announcements. Sources: linked below.
[3] TCEP documents, preliminary determination. Sources: linked below.
[4] Adjusted Capacity is in metric tons per year assuming operations for 365 days per year; based on company announcements (which assume operations for 340 days per year). See Methodology.

END PRODUCTS: Ammonia, also upgraded to 23 products in 24 plants on BASF’s Freeport site, including Caprolactam and Polyamide-6 (nylon).

In April 2018, Yara and BASF “celebrated the opening” of their new joint venture ammonia plant at Freeport, TX.

“Together with our partners at BASF, we built a world-scale ammonia plant that not only raises the bar in terms of safety, efficiency and quality but also applies the principles of industrial symbiosis by using a by-product as feedstock for ammonia production,” says Yara President and CEO, Svein Tore Holsether …

Conventional ammonia plants use natural gas to produce the hydrogen needed during ammonia production. Yara Freeport’s hydrogen-based technology allows the plant to forego this initial production step, leading to lower capital expenditure and maintenance costs. By using hydrogen, which originates from the production processes of various petrochemical plants nearby, Yara Freeport safeguards resources and mitigates environmental impact.
Yara press release: Yara and BASF open world-scale ammonia plant in Freeport, Texas, 04/11/2018

In February 2015, Yara and BASF confirmed their plans to invest $600 million in a new 750,000 mtpy ammonia plant, dubbed Project Peony. Less than six months later, in July 2015, they held a groundbreaking ceremony on BASF’s existing Freeport site.

According to Yara’s 2Q 2017 Earnings Presentation, from July 2017, the plant was on schedule for start-up in the fourth quarter of 2017. Following Hurricane Harvey, which caused massive flooding across the area, Yara reps confirmed to me that “there will possibly be some delay in start-up due to hurricane Harvey, but most likely nothing major.” By the time Yara published its next report in October 2017, the Q3 2017 Earnings Presentation, start-up had been pushed back to Q1 2018.

At the end of March 2017, when Yara published its 2016 Annual Report, the plant was “65% complete and is expected to commence commercial operations in late 2017.” The year before, in its 2015 Annual Report, it had been “30% complete.”

This project was first announced in October 2013, and its location was confirmed in May 2014. In May 2014 the companies had said that “construction could begin as early as January 2015 and last until the middle of 2017.” The original announcements estimated capex at $750 million, but this had been reduced to $600 million by the time they made the investment decision.

The $600 million investment in the joint venture will be split 68% from Yara and 32% from BASF, with Yara making an additional investment to build an ammonia storage tank, “bringing Yara’s total investment to USD 490 million.” In other words: BASF will invest $192 million and Yara will invest $408 million in the plant, and Yara’s storage tank will cost $82 million. The total site investment is $682 million including Yara’s ammonia storage tank.

Click to enlarge. Yara: 2Q 2017 Earnings Presentation, 07/18/2017
According to Yara’s earnings presentation from July 2017, its investment in the joint venture came to NOK 3 billion, across 2016-2018.

Yara was responsible for managing construction but BASF will operate the plant and the export terminal. The project is classified as a joint investment because “activities that significantly affect the return on the investment must be made by the Board of Managers with unanimous consent. In the Board of Managers each party [Yara and BASF] nominate three members.”

Both Yara and BASF have experience of producing ammonia that is second to none: Yara already owns (at least partly) over a dozen operational plants worldwide, including its Canadian plant at Belle Plaine, SK, while BASF commercialized the Haber-Bosch process over a hundred years ago.

The companies awarded KBR “a fixed price turnkey contract” for EPC, and will also license KBR’s ammonia synthesis technology.

In December 2013, the local Brazoria County council approved “a seven-year, 100-percent tax abatement … worth $21.2 million,” set to begin in 2016; incentives from other local entities were also in the works.

In February 2015, TCEQ published a preliminary determination to approve construction of the plant. The plant’s direct environmental impact is less than most ammonia plants because it does not use natural gas as feedstock. Instead, the plant receives hydrogen through a new series of pipelines, built by Praxair. This reduces on-site emissions and, for as long as Dow’s new ethylene cracker is supplying the plant with its byproduct hydrogen, somewhat reduces the carbon footprint of the produced ammonia. However, the hydrogen still comes from natural gas and still carries a heavy carbon footprint and will do so until Praxair begins generating renewable hydrogen at industrial scale.

Praxair signed a 20-year agreement to supply hydrogen feedstock at a rate of 170 million scfpd, as well as supplying the plant with 2,000 stpd of nitrogen. Although Freeport is already served by a hydrogen pipeline operated by Air Liquide, Praxair will spend “more than $400 million” on the infrastructure to serve this project, increasing its hydrogen and nitrogen generating capacity and extending its pipelines by 46 miles. Praxair expects the new pipelines to be “in operation in 2016.” “The feedstock contracts have take-or-pay clauses, partly supported by guarantees from Yara and BASF. The total take-or-pay commitment on Yara’s share is USD 488 million (undiscounted).”

For Yara and BASF, the effect of using hydrogen instead of natural gas is that it “reduces capex and maintenance significantly,” as it eliminates (or outsources) the steam reforming process. This may mean that the plant’s feedstock costs will be higher than for other plants in the area; however, for Yara’s global trading, this will still be better than European gas prices, because the Praxair contract links “the feedstock variable cost to the advantageous natural gas prices available at the U.S. Gulf coast.”

The ammonia produced will be split between each party “in accordance with its equity share,” meaning that (given a capacity of 750,000 mtpy) Yara will have a new supply of 510,000 mtpy to ship from the Gulf Coast, and BASF will no longer need to buy 240,000 mtpy.

Yara’s share will be sold “mostly to industrial customers in North America, in addition to supplying the agricultural sector.”

BASF consumes ammonia at Freeport to produce caprolactam for nylon: this plant will let it “take advantage of world-scale production economics and the attractive raw material costs in the United States. We will thus strengthen … the competitiveness of our polyamide 6 value chain in the region.”[/memberful]

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ADDRESS: 602 Copper Road, Freeport, TX 77541



  • USGS: Minerals Yearbook, Nitrogen [RECENT / ARCHIVE]
  • Air permit documents: Texas Commission on Environmental Quality (TCEQ): permit documents [LINK]
  • Permit to Construct: Texas Commission on Environmental Quality (TCEQ): Preliminary Determination [PDF]


  • 04/12/2018: Praxair press release: Praxair Starts Up Gas Supply to New World-Scale Yara Freeport LLC Ammonia Plant [LINK]
  • 04/11/2018: Yara/BASF joint press release: Yara and BASF open world-scale ammonia plant in Freeport, Texas [Yara: LINK / BASF: LINK]
  • 10/19/2017: Yara: 3Q 2017 earnings presentation [PDF]
  • 03/27/2017: Yara: 2016 Annual Report [PDF]
  • 10/21/2016: Yara: 3Q 2016 earnings presentation [PDF]
  • 03/21/2016: Yara: 2015 Annual Report [PDF]
  • 07/28/2015: Yara/BASF joint press release: Yara and BASF break ground on new ammonia plant in Freeport, Texas [Yara: LINK / BASF: LINK]
  • UNDATED: KBR project profile: BASF / Yara Ammonia [PDF]
  • 07/20/2015: Houston Business Journal: Chemical giant staffing up for major Freeport projects [LINK]
  • 02/20/2015: KBR press release: KBR Awarded Freeport, Texas Ammonia Plant EPC Contract [LINK]
  • 02/19/2015: Praxair press release: Praxair Gulf Coast Expansion to Serve Freeport, Texas, and Supply New World-Scale Ammonia Project [LINK]
  • 02/19/2015: Yara/BASF joint press release: Yara and BASF to build ammonia plant in Freeport, Texas [Yara: LINK / BASF: LINK]
  • 05/14/2014: Argus Media: Analysis: Yara, BASF chase ammonia cost savings [LINK]
  • UNDATED: BASF facility factsheets: Freeport, Texas [PDF and PDF]
  • 05/08/2014: Yara / BASF press releases: BASF and Yara plan to build ammonia plant in Freeport, Texas [Yara: LINK / BASF: LINK]
  • 12/31/2013: The Facts: County grants tax breaks for companies [LINK, login]
  • 12/17/2013: Wall Street Journal: Shale Gas Lures BASF to the US [LINK, login]
  • 10/18/2013: Wall Street Journal: Yara, BASF Weigh New US Investment [LINK, login]
  • 10/18/2013: Yara / BASF press releases: Potential joint ammonia investment [Yara: LINK / BASF: LINK]

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