Yara have signed an agreement with the new owners of Burrup Holdings Pty Ltd.
The Group have acquired a 30% stake in the world scale ammonia plant on the Burrup Peninsula of Western Australia.
The plant is currently under construction and is the first chemical processing facility based on gas from the Australian North West continental shelf. The plant has a capacity of 760,000 tonnes per year and is expected to start production in the second half of this year.
Commenting on the acquisition, President and CEO at Yara International Thorleif Enger said, “With Burrup we have found an excellent strategic fit, including sound economies based on a competitive natural gas price and future development opportunities. We believe that this new alliance will serve to future strengthen Yara’s positioning Asia and Oceania”.
The agreement represents an important step forward in strengthening their global market position within ammonia. Yara will use this as a stepping-stone to downstream the processing of nitrogen fertilisers and civil explosives.
This agreement is the ‘hat-trick’ of deals between Yara and Burrup. In 2002, Yara entered a long-term agreement to market and sell 100% of the production from the new ammonia plant. In 2004, Yara expanded its ammonia shipping capacity with the addition of two new 60,000 cubic metre vessels that will particularly suit trade to and from Asia.
Mr Thorlief added, “As part of this deal we have secured an option to participate in a possible development of a second plant, currently being assessed by Burrup, which could involve ammonium nitrate and urea. This option includes agreements to supply key technology and to be responsible for the marketing. The timing if possible new projects will depend on the development of the market balance for the respective products”.
The final transaction is subject to Australian authorities.