Martin Midstream Partners LP (MMLP) said March 3 that its new ammonium sulfate plant at Plainview, Texas, should be up and running in two weeks. The company said the new facility should help it increase overall fertilizer margins and production quality. The cost of bringing this online is put at just over $5 million.
The capacity of the new AS plant is expected to be 400 st/d, according to knowledgeable sources, who said one goal was to make the granular size more consistent. MMLP had not returned calls by March 11.
In the second quarter, MMLP will begin construction of a third priller at its Beaumont, Texas, facility at a cost of $4 million. It said the extra capacity is needed as a new prill contract will start with another major refiner Jan. 1, 2012. MMLP already has the capacity to prill 4,000 mt/d at Beaumont. Capacity at its Port of Stockton facility is 1,000 mt/d.
MMLP also confirmed that it has recently added two more refiners for prill contracts at Beaumont. The two will add $2.5 million of cash flow on an annual basis. The company processes molten sulfur into prilled sulfur on a take-or-pay fee contract basis.
MMLP also noted that it restructured its most significant sulfur supply contract, which is with CF Industries Holding Inc., effective Jan. 1, 2011, due to the volatile sulfur market. The contract is now tied to its actual supply costs of sulfur plus a margin. As a result, MMLP says it no longer has any inventory or lag time exposure. “So it’s basically a straight pass-through and we charged them for the system that we utilized to get the product to us,” Ruben Martin, MMLP chairman and CEO, told analysts.
Operating income from MMLP’s sulfur services segment, which includes both fertilizer and sulfur, was up 66 percent for the year ending Dec. 31, 2010, to $15.9 million on sales of $165.1 million from the prior year’s $9.6 million on sales of $79.6 million. The increased revenues were attributed to higher prices. Annual sulfur volumes were up slightly, to 1.13 million lt from the prior year’s 1.11 million lt. Fertilizer volumes were 274,900 lt, up from 238,000 lt.
MMLP’s annual fertilizer and industrial sulfur product sales have gone from 62,000 tons in 1997 to 275,000 tons in 2010.
As reported last week, MMLP reported a significant boost to company earnings in the fourth quarter (GM March 7, p. 13), though full-year income was down.
The only significant impact of the cold weather this winter was sulfur-related, according to Martin. He said the company had to scramble to make sure sulfur got to its sulfuric acid plant in Plainview. The facility processes molten sulfur into about 500 st/d of sulfuric acid.
MMLP has had ongoing production problems at the acid plant, with electrical problems a major issue. In 2010, such an outage caused by a winter storm took the plant offline for 65 days. Martin believes a new $3.5 million co-generation plant at Plainview will be a significant insurance policy against future outages (GM May 17, 2010).