OCI Global and NuStar Sign Agreement to Deliver Ammonia into the Midwest
OCI Global (Euronext: OCI) and NuStar Energy L.P. (NYSE: NS) announced that their affiliates have entered into an agreement for OCI Global (“OCI”) to transport ammonia on a new segment of NuStar Pipeline Operating Partnership L.P.’s (“NuStar”) Ammonia Pipeline System.
Under the arrangement, NuStar will install a new 14-mile pipeline segment that will connect OCI’s Nitrogen facility in Wever, Iowa with NuStar’s existing 2,000-mile anhydrous ammonia pipeline, which originates in Louisiana and flows northbound to various points in the Midwest, including Iowa.
OCI’s facility uses ammonia to make fertilizer and produce DEF (Diesel Exhaust Fluid), which reduces emissions from diesel engines in cars, as well as light and heavy-duty trucks, farming equipment and other heavy machinery.
Brad Barron, NuStar Chairman and CEO said:
We are pleased to partner with OCI to better serve the area’s agricultural needs by delivering more ammonia to help meet fertilizer demand for local and regional farmers and by providing additional ammonia to serve as feedstock for upgraded products.
“We expect this healthy-return, low-capital project to meaningfully increase utilization of our system in 2024 and we are excited about the growing interest in ammonia – to reduce emissions and supply the globe – which we expect to generate significant additional opportunities for even greater utilization of our Ammonia Pipeline System over the next several years.”
The agreement has been executed by both companies and commits NuStar to provide transportation services under a long-term arrangement. To facilitate the project, OCI has committed $30 million in capital expenditures for new ammonia cooling and storage infrastructure. The proposed infrastructure will allow OCI to economically transport ammonia from the Gulf Coast and capitalize on its existing storage capacity.
OCI, which owns and operates U.S. ammonia production facilities in Wever, Iowa and Beaumont, Texas, is expected to bring an additional 1.1 million tons of blue ammonia capacity online in 2025 in the Gulf Coast.
Ahmed El-Hoshy, OCI Global CEO said:
We are excited to work with NuStar, a leader in safe and responsible midstream operations.
“This highly cost-effective project will allow us to safely and sustainably reach new customers, strengthens our position in the premium U.S. Midwest market and is one further step in our ammonia logistics.”
“As one of the most efficient manufacturing plants in the nation, OCI Nitrogen, Iowa is leading the way in providing U.S. farmers a stable, high-quality source of nitrogen fertilizer products. Our plant in Iowa has been central to our U.S. operations since starting up in 2017 and we look forward to continued investment in the region.”
About OCI Global
OCI Global is a global leader in nitrogen, methanol and hydrogen, driving forward the decarbonization of the energy-intensive industries that shape, feed and fuel the world. OCI’s production capacity spans four continents and comprises approximately 16.7 million metric tons per year of hydrogen-based products including nitrogen fertilizers, methanol, biofuels, diesel exhaust fluid, melamine, and other products.
OCI Global has more than 4,000 employees, is headquartered in the Netherlands and listed on Euronext in Amsterdam.
NuStar Energy L.P., a publicly traded master limited partnership based in San Antonio, Texas, is one of the largest independent liquids terminal and pipeline operators in the nation. NuStar currently has approximately 9,500 miles of pipeline and 63 terminal and storage facilities that store and distribute crude oil, refined products, renewable fuels, ammonia and specialty liquids.
The partnership’s combined system has approximately 49 million barrels of storage capacity, and NuStar has operations in the United States and Mexico. For more information, visit NuStar Energy L.P.’s website at www.nustarenergy.com and its Sustainability page at https://sustainability.nustarenergy.com/.