FREEPORT - Norway-based Yara International ASA and German chemical giant BASF SE confirmed they will build a major $600 million "world-scale" ammonia plant to open 2017 at BASF's existing property.
The ammonia plant will be owned 68 percent by Yara and 32 percent by BASF. The plant will have a capacity of about 750,000 metric tons per year.
Yara also will build an ammonia tank at the BASF terminal, bringing Yara's total investment to $490 million. BASF will upgrade its current terminal and pipeline assets.
A 20-year supply agreement for nitrogen and hydrogen has been signed with Connecticut-based Praxair Inc., who is investing more than $400 million to add hydrogen and nitrogen production capacity and extending its Gulf Coast pipeline systems approximately 46 miles from Texas City to the Freeport area.
The pipeline extensions are scheduled to be in operation 2016 and the supply to the complex is expected to start late 2017.
The project follows the trend of foreign chemical companies rushing to invest in Gulf Coast chemical plant expansions to take advantage of cheap shale gas, which is used as a feedstock for many chemicals, including ammonia.
Yara has expertise in the global ammonia network and BASF is a major consumer of ammonia for its downstream manufacturing activities. Ammonia can be used in the manufacturing of fertilizers, home furnishings and explosives.
In Houston, BASF currently employs more than 1,200 people at multiple plants. It also is investing millions of dollars in building a new emulsion polymers plant at its existing chemical complex in Freeport.