Rentech Nitrogen Announces Completion of Project to Increase Urea Capacity
Rentech Nitrogen Partners, L.P. (NYSE: RNF), which manufactures and sells nitrogen fertilizer products including ammonia, urea ammonium nitrate solution (UAN) and ammonium sulfate (AS), today announced that it has completed its previously announced capacity expansion project to increase urea production by 21,900 tons, or 15 percent, at its nitrogen fertilizer facility in East Dubuque, IL. This is an annual increase of 2,650 tons from the previous estimate of 19,250 tons and is based on actual plant operation.
The additional urea tons will be converted into and sold as diesel exhaust fluid (DEF) to Yara North America Inc., and the sales are expected to provide an incremental increase to Rentech Nitrogen's cash available for distribution beginning in 2013. Yara maintains the exclusive rights to purchase DEF produced at Rentech Nitrogen's facility under a long-term agreement based on index pricing and distribute the DEF through its Air1® brand. Rentech Nitrogen began supplying Yara with DEF last year when the Partnership installed mixing, storage and load-out equipment for DEF production at its East Dubuque facility.
DEF is a high-purity urea solution composed of de-ionized water and prime urea. As part of the Clean Air Act, the U.S. Environmental Protection Agency has mandated that all on-road diesel vehicles (Class I through Class 8) manufactured on or after January 1, 2010 employ an emissions-reducing engine technology which specifically targets hazardous nitrous oxide (NOx) emissions. The market-leading solution for heavy-duty vehicles to comply with these stricter emissions standards is selective catalytic reduction (SCR), which involves injecting DEF into the exhaust of vehicles and achieves NOx reductions in excess of 90 percent. The Engine Manufacturers Association has estimated the U.S. DEF demand at 50 million gallons in 2010, rising to 750 million gallons in 2015, and 1.3 billion gallons in 2019.
The DEF produced by Rentech Nitrogen is designed to meet the high standards of ISO 22241 specifications to protect engine catalysts.
The total capital cost of the urea/DEF expansion project was approximately $7 million.
About Rentech Nitrogen, L.P.
Rentech Nitrogen (www.rentechnitrogen.com) was formed by Rentech, Inc. to own, operate and expand its nitrogen fertilizer business. Rentech Nitrogen's assets consist of two fertilizer production facilities owned by its operating subsidiaries. Rentech Nitrogen's East Dubuque facility is located in the northwestern corner of Illinois, and uses natural gas as a feedstock to produce primarily anhydrous ammonia and urea ammonium nitrate solution for sale to customers in the Mid Corn Belt. Rentech Nitrogen's Pasadena facility is located in Pasadena, Texas along the Houston Ship Channel. Rentech Nitrogen's Pasadena facility is the largest producer of synthetic granulated ammonium sulfate fertilizer in North America, with sales in the United States and South America. The Pasadena facility's other products, which are sold domestically, include ammonium thiosulfate fertilizer and sulfuric acid. The facility uses ammonia and sulfur as its primary feedstocks.
Forward Looking Statements
This press release contains forward-looking statements about matters such as: the projected production of the urea/DEF expansion project; its contribution to Rentech Nitrogen's cash available for distribution; and the projected growth of the U.S. DEF market. These statements are based on management's current expectations and actual results may differ materially as a result of various risks and uncertainties. Other factors that could cause actual results to differ from those reflected in the forward-looking statements are set forth in Rentech Nitrogen's prior press releases and periodic public filings with the Securities and Exchange Commission, which are available via Rentech Nitrogen's website at www.rentechnitrogen.com. The forward-looking statements in this press release are made as of the date of this press release and Rentech Nitrogen does not undertake to revise or update these forward-looking statements, except to the extent that it is required to do so under applicable law.
Rentech Nitrogen Partners, L.P.
Julie Dawoodjee Cafarella
Vice President of Investor Relations and Communications