CF Industries Acquires Ammonia Production Complex in Waggaman, LA
The Waggaman ammonia production facility and related assets have been purchased for $1.675 billion, which includes a long-term ammonia offtake agreement between the companies.
CF Industries Holdings has announced the closing of its acquisition of Incitec Pivot Limited’s (IPL) ammonia production complex and its associated assets located in Waggaman, LA. According to the terms of the transaction, CF Industries purchased the Waggaman complex for $1.675 billion, which will be subject to further adjustments.
Waggaman ammonia production facility; Image Credits: Incitec Pivot Limited
CF Industries and IPL have allocated approximately $425 million of the purchase price to a long-term ammonia offtake agreement. This agreement will have CF Industries supply up to 200,000 tons of ammonia per year to IPL’s subsidiary, Dyno Nobel, at production economics. The remaining purchase price was funded by CF Industries with cash on hand.
“We are pleased to grow our ammonia production capabilities with the addition of IPL’s Waggaman ammonia production facility and team,” said Tony Will, President and CEO, CF Industries Holdings. “This transaction deploys our capital efficiently, delivering immediate profitable growth by adding ammonia production units in North America into our existing network, while advancing our long-term strategic focus on low-carbon ammonia as a clean energy source.”
In addition to its offtake agreement with IPL, CF Industries will maintain medium and long-term offtake agreements with two customers that signed prior to the acquisition. Carbon capture and sequestration (CCS) technologies will be implemented at the site on an accelerated timeline, boosting the system’s low-carbon ammonia production and earning 45Q tax credits for sequestered CO2.
