Agrium to proceed with construction of world scale nitrogen facility
Agrium Inc. (TSX:AGU) (NYSE:AGU) announced today that it and its project co-owners are proceeding with the construction of a world scale nitrogen facility to be located in Damietta, Egypt, with completion expected in 2010. The plant will be designed and built by Uhde GmbH and consist of two ammonia and urea trains with a combined capacity of 1.3 million tonnes of urea and 100,000 tonnes of net ammonia.
“This is an outstanding opportunity for Agrium to construct and operate a facility in an area with long-term, competitively priced gas, prime access to world markets, and an efficient, well-educated workforce. Our project co-owners bring local business knowledge, energy supply and distribution expertise, which combined with our expertise in marketing and operations, positions this project very well, and we expect the facility to have one of the lowest operating costs in the world,” said Mike Wilson, Agrium President and CEO.
Agrium will have a 60 percent interest in the EAgrium joint venture. Egyptian government owned entities EChem and EGAS will hold a 24 percent interest in the joint venture, and GASCO, the national operator of the gas distribution grid, will hold a nine percent interest. The Arab Petroleum Investment Corporation (APICORP) will hold the remaining seven percent interest. Agrium is to be the exclusive marketer of the nitrogen products exported from this facility.
The lump sum turn-key project is scheduled to commence by May 15, 2007, with the first train expected to be complete the first half of 2010 and the second train to be complete by the end of 2010. The construction cost of the facility and related infrastructure is forecast to be approximately $1.2-billion. The majority of the project is expected to be financed through non-recourse debt, with the remainder funded by equity contributions from the co-owners. The project is conditional on a lender financing commitment.
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