CF’s completes its expansion
On October 26, ahead of its 3Q16 earnings, CF Industries (CF) announced the completion of its Donaldsonville capacity expansion project located in Louisiana. It started its new ammonia plant. The plant has been in operation since September 2016. So far, it produced more than 50,000 tons of ammonia. The company added that the plant has “now achieved consistent, stable operation over the nameplate capacity of approximately 3,600 tons per day.”
Largest facility by capacity
With the completion of this project, CF has the largest nitrogen (MOO) facility by capacity in the world with a total gross ammonia capacity of 4.3 million tons. It increased from 3.1 million tons, as you can see in the above chart. CF is followed by Qatar Fertilizer Company with ~3.5 million tons in capacity, JSC Togliattiazot with ~3 million tons in capacity, PotashCorp (POT) with ~2.2 million tons in capacity, and Safco with ~2 million tons in capacity. The capacity expansion even left behind companies such as CVR Partners (UAN) and Agrium (AGU).
In 2012, CF Industries announced nitrogen expansion projects at Donaldsonville in Louisiana and Port Neal in Iowa. These expansion projects were commissioned to primarily take advantage of low natural gas prices in the US. With the fertilizer industry already laden with oversupply, it’s important to understand the rationale behind CF’s new capacity. We’ll discuss the rationale in the next part.