Rentech Nitrogen ammonia capacity expansion moves ahead

Rentech Nitrogen Partners has obtained a loan of around $40m from Rentech to carry out its ammonia capacity and storage expansions.

The company has also entered into a fixed-price engineering and procurement contract with Black & Veatch, which is expected to be completed by the end of 2013.

Rentech Nitrogen said significant work on the expansion project has been completed to date, including a feasibility study, front-end engineering and design, final air and construction permits, and commencement of construction of certain long lead-time items.

The work related to the expansion will result in various upgrades to the facility, including an approximately 50% increase in ammonia loading capacity and upgrades to controls at the ammonia and urea plants.

The capital expenditures for the expansion are expected to total approximately $100m, of which approximately $20m relates to the construction of the additional on-site ammonia storage tank.

The expansion will bring Rentech Nitrogen's ammonia production capacity to approximately 370,000t/year, and will increase on-site ammonia storage capacity to 60,000t/year at its facility in East Dubuque, Illinois, US.

Rentech Nitrogen also has access to 15,000t of leased ammonia storage in Niota, Illinois.

Rentech Nitrogen said the additional ammonia production, which is expected to be sold primarily as ammonia, will be useful for improving other products. The company is also planning to improve the energy efficiency of its plant by approximately 6% as a result of lower natural gas usage per ton of ammonia produced partially offset by increased electricity usage per ton.

CEO Hunt Ramsbottom said the company believe that long-term industry fundamentals favouring strong fertiliser demand and low natural gas costs support the growth in their capacity.

"In addition to the ammonia capacity expansion and our urea/DEF capacity expansion currently underway, we are evaluating other opportunities to increase cash flow," Ramsbottom said.