Manufacturing News

US shale gas boom behind new Incitec Pivot factory

Incitec Pivot has credited the boom in US shale gas as a factor in its decision to build a new ammonia factory in Louisiana.

Incitec, which makes fertiliser and explosives for the agriculture and mining industries, is a heavy user of gas, and its CEO, James Fazzino, a critic of Australia’s unrestricted approach to gas exports.

''[The plant] takes our North American business and any future expansions back to US gas economics,'' said Fazzino in a statement.

''This is vital to this project because 80 per cent of the cost of making ammonia is gas.''

As reported by Manufacturers’ Monthly and others on Wednesday, a combination of debt and internally-generated cash flows would pay for the $US 850 million plant, with which the company aims to create 800,000 metre tonnes-per-year of ammonia.

Dow Jones reports that Incitec’s Dyno Nobel division has contracted KBR to build the plant and provide the ammonia technology.

The plant is significantly bigger than initially planned, according to AP, which reports that Dyno’s feasibility study commenced last year was for a $US 30 million factory.

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