Tag: PotashCorp

POT+AGU merger is on

The merger of equals between PotashCorp and Agrium was confirmed to be moving ahead this morning, in a press release announcing their boards' unanimous approval of the plan "to Create a World-Class Integrated Global Supplier of Crop Inputs."

"A new parent company will be formed to own both companies. PotashCorp shareholders will receive 0.400 common shares of the new company for each common share of PotashCorp they own, and Agrium shareholders will receive 2.230 common shares of the new company for each common share of Agrium they own."

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PotashCorp: downgraded, capex reduced, but new urea brownfield

In a move that might appear contrary to its "Disciplined Approach" of "Matching Supply to Demand," PotashCorp is quietly planning a potential new urea plant at Geismar.

More details of the brownfield project, which received its air permit in December 2015, are in my Research Note for Geismar, LA. The new urea plant is an addition to PotashCorp's existing plans for a major ammonia expansion.

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2015 in review: start-ups and cancellations, but mainly delays

Nine ammonia projects were supposed to start up in 2015. Two succeeded.

OCI's debottleneck at Beaumont, TX, came on-stream in April 2015, and PotashCorp completed its expansion at Lima, OH, in October 2015.

So: in 2015, less than 200,000 mtpy of new ammonia capacity came on-stream.

Of the seven other projects slated for 2015, two were cancelled and the rest have been pushed into 2016.

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CEO commentary, Q1 2015. Discuss: Will the US be a nitrogen exporter?

If you want to know whether - or when - the US will become a nitrogen exporter, read what the fertilizer company CEOs say during the latest round of quarterly earnings calls.

These guys should have formed pretty solid opinions by now about how the capacity expansions will affect long-term supply and demand, and how they're going to gain/keep market share and competitive advantage. But it can be a challenge to infer what those opinions might be.

I've summarized the pertinent parts of the debate here, with quotes from Agrium, CF Industries, KBR, LSB Industries, OCI, Potash Corp, and Yara.

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Augusta, GA — PotashCorp

Ammonia Plant: Augusta, GA - PotashCorp

UPDATED: 11/22/2016 — see Change Log

OWNER: PCS Nitrogen LP (Potash Corporation of Saskatchewan / PotashCorp)
PROJECT: Nitrogen plant

SUMMARY STATUS: Operational
Ammonia production began at Augusta in 1964. The present plant started up in 1977, with revamps and expansions in 1996 and 2012, and a significant ammonia expansion during turnaround in 2016. In September 2016, Agrium and PotashCorp announced a potential "merger of equals."

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Geismar, LA — PotashCorp

UPDATED: 10/03/2017 — see Change Log

OWNER: PCS Nitrogen LP (Potash Corporation of Saskatchewan / PotashCorp)
PROJECT: Nitrogen plant, restart, expansion and urea brownfield

SUMMARY STATUS: Operational, Planning Phase
The Geismar ammonia plant started up in 1967 but was idled in 2003, due to the high cost of natural gas feedstock. PotashCorp restarted the plant in February 2013 at a cost of $260 million. Air permit documents from 2014 and 2015 reveal plans for significant future expansions. In September 2016, Agrium and PotashCorp announced a potential "merger of equals."

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Lima, OH — PotashCorp

UPDATED: 12/20/2016 — see Change Log

OWNER: PCS Nitrogen LP (Potash Corporation of Saskatchewan / PotashCorp)
PROJECT: Nitrogen fertilizer plant, expansion

SUMMARY STATUS: Operational
Announced in 2013, PotashCorp's latest ammonia expansion came online in October 2015 after a 7-week turnaround. The urea expansion came online in 2014. The Lima site has been producing ammonia since 1955. In September 2016, Agrium and PotashCorp announced a potential "merger of equals."

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Potash shareholder Q&A

Wayne Brownlee, EVP and CFO of Potash, during a Q&A with shareholders on 6/10/13:

So it's very competitive, very healthy. We may well see a situation where excess capacity comes on in the United States. And we may see some more challenging times on ammonia prices than we've seen ...

The nice thing about United States is that there is a lot of room to displace the imports ...

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