Norwegian giant Yara acquires Gulf Coast Ammonia project in Texas for $1.3 billion

USA/Norway: Yara has agreed a $1.3 billion deal for the Gulf Coast Ammonia (GCA) plant in Texas, an acquisition that gives the Norwegian major access to a further 1.3m. tonnes/year of US Gulf production capacity.

The agreement was reached with GCA Holdings, affiliated with Lotus Infrastructure Partners and MB Energy, the Oslo-headquartered group announced today, adding the Texas City facility remains in its commissioning phase.

The plant, which was due to launch several years ago before lengthy delays, “is anticipated to continue ramping up toward full production and stable operations by end of 2026, with production targeted at above nameplate capacity”, Yara said.

The Scandinavian giant has lifted several cargoes from the new Port of Texas City export terminal in recent months, with tankers belonging to other leading players also regularly visiting the port for markets in the Americas, Africa and Europe.

“Yara sees investing in the US as highly attractive, reinforcing its long-time presence as a reliable provider of crop nutrition solutions and producer of ammonia,” it said in a lengthy press release.

“The acquisition demonstrates execution of Yara’s strategy to diversify its energy exposure and enhance the competitiveness of its global ammonia production footprint.

“Yara will own the ammonia plant with an expected nameplate capacity of 1.3m. tonnes per annum, with Air Products supplying the industrial gases to Yara as part of a long-term supply agreement."

“By bringing this plant into the Yara portfolio, we are strengthening our operational resilience and diversifying our energy costs at a time when supply flexibility matters more than ever,” said Yara President and CEO, Svein Tore Holsether.

“This addition of world-class US production capacity supports our long-term strategy of diversifying our energy exposure, capturing economies of scale and lowering both fixed costs and capital per tonne.”

The acquisition will strengthen Yara’s competitiveness, it added, noting that after “comprehensive technical due diligence”, the plant has the “potential to become one of the most efficient and profitable assets in the global portfolio”.

“Yara will utilise its midstream ammonia platform to supply both external customers, and its own internal sourcing needs,” it continued.

“This further strengthens Yara’s ability to serve its fertilizer production system and key industrial customers with reliable ammonia supply.”

The deal includes the ammonia synthesis loop and related ammonia storage and exclusive use of loading infrastructure. Hydrogen and nitrogen supply, along with other utilities, are supplied through a long-term contract with hydrogen major Air Products.

“This contributes to Yara’s strategic priority of gas diversification, with a significant increase of US gas exposure (Henry Hub),” Yara explained.

“The set-up is similar to Yara’s operations in Freeport, also in Texas, where a comparable model combined with Yara’s ammonia expertise has supported strong operational improvements and consistently high performance.”

Huge deal builds on existing collaboration

News of the GCA agreement comes just 24 hours after Yara announced it will not proceed with the acquisition of the ammonia assets in the Louisiana Clean Energy Complex (LCEC) from Air Products.

However, the pair, who already enjoy close collaboration, are continuing to finalise the previously announced marketing and distribution agreement for renewable ammonia from the NEOM Green Hydrogen plant in Saudia Arabia.

“In addition, the set up in GCA presents opportunities for a flexible, step-wise entry to low-carbon [blue] ammonia, subject to regulatory development and financial viability,” Yara added this morning.