The deal will see North American Cooperative CHS make an equity investment in a wholly owned CF subsidiary and also enter into a supply agreement for up to 1.1m. tons of urea and 580,000 tons of UAN, representing 8.9% of CF’s total system capacity. The product will be supplied at market value with the transaction set to close 1 February 2016.
In a separate announcement, CHS stated that it will not progress earlier plans for the construction of a fertilizer plant at Spiritwood, North Dakota. The plans were previously expected to deliver a 0.8m.st/year ammonia plant to support production of 1.1m. st/year of urea, urea for DEF and 0.6m. st/y of UAN. Completion was set for 2018 at an estimated cost of $3billion.
Commenting on the cancellation of the project, CHS President and Chief Executive Carl Casale stated that the company “determined that the construction cost, water supply challenges, overall risk profile and time required for the Spiritwood project had changed significantly since it was first considered.”
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