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Ammonia Offtake Agreement

LONDON (ICIS) – A change of ownership at the Kaltim Pasifik Amoniak (KPA) ammonia plant will not affect the long-term delivery agreement of the Indonesian nitrogen plant with Mitsui, the Japanese fertilizer trader confirmed on Monday. Tim Bullock, CEO of Mabanaft, said: “Mabanaft is very excited to be the operational partner of this project. This is an important strategic step for Mabanaft to expand our portfolio and build a footprint in the chemical growth markets and to use our group`s network of leading business partners. The joint venture between Starwood Energy and Mabanaft demonstrates Mabanaft`s commitment to investing in North America and, more importantly, an important step in Mabanaft`s entry into the ammonia market, which is supported by equity assets. The new facility is not only the largest of its kind, but it will also provide state-of-the-art safety standards for the production and storage of ammonia. Gulf Coast Ammonia LLC (GCA), Air Products and Eastman Chemical Company have entered into definitive financing agreements for the construction of the world`s largest ammonia synthesis loop for a train in Texas City, TX. When it opens in 2023, the plant will supply approximately 1.3 million tonnes of ammonia per year (approximately 9% of the world`s supply). GCA has been awarded long-term contracts for most of its production capacity and long-term supply contracts for its raw materials. GCA invests $600 million in the construction, operation and ownership of ammonia. As part of the agreement, Mitsui agreed to work closely with Pupuk Kaltim`s owner, the Pupuk Indonesia Holding Company (PIHC), as part of a “future global effort” between the two companies, Mitsui said. Under a build, operating and transfer agreement (BOT) signed in 1997, the assets were to be transferred to Pupuk Kaltim State as soon as the 2,000-tonne-per-day facility became profitable. The plant will be located on Eastman Chemical Company land in the Texas City Industrial Park and will include part of access to the Port of Eastman.

Eastman will not only earn two long-term tenants and a reduction in incidental costs, but will also receive a way to purchase cheap ammonia for the manufacture of its special products. Mitsui and joint venture partner Toyota Tsusho agreed late last week to pass full control of the 660,000-tonne-an KpA ammonia plant to PT Pupuk Kalimantan Timur (Pupuk Kaltim).