Kinder Morgan Energy Partners LP last week reportedly told Terra Industries Inc. that it will not be renewing Terra’s anhydrous ammonia storage contract at the Blytheville, Ark., terminal. As a result, according to industry sources, Terra will no longer store ammonia at the Blytheville terminal as of the end of this year.
Kinder Morgan told Green Markets that it does not comment on customer contracts, but confirmed that it “is reviewing options to convert the tanks to UAN service.” Terra also leases UAN storage at Blytheville, and industry sources said that contract will not be affected.
Terra sold the Blytheville assets to Kinder Morgan in 2005 (GM July 18, 2005) through its subsidiary, Terra Nitrogen Co. LP (TNCLP). Kinder Morgan then leased the ammonia and UAN storage capacity at the site back to Terra. Kinder Morgan lists capacity at the Blytheville terminal at 45,000 tons ammonia, 40,000 tons dry bulk, and 14,000 tons liquid. Other commodities handled at the site include UAN, specialty chemicals, alloys, coal, and grains.
Kinder Morgan paid TNCLP $5 million for the Blytheville terminal assets in 2005. Terra then signed an exclusive lease with Kinder Morgan through the end of 2010 for all the facility’s anhydrous ammonia and UAN terminal assets, with renewal options. Terra used the anhydrous ammonia and UAN terminal assets to store and distribute nitrogen products from its manufacturing facilities and import distribution assets.
The Blytheville facility was originally a production site for Terra, with 430,000 st/y of ammonia capacity and 480,000 st/y of urea capacity. Terra announced in 2004 that it was permanently discontinuing production at Blytheville due to high natural gas costs (GM April 5, 2004), and that it would use the facility storage and distribution assets as a terminal for ammonia produced at Terra’s Verdigris, Okla., facility or obtained from other sources. Blytheville’s ammonia and urea capacities at the time of the plant’s closure in 2004 represented 14 and 73 percent, respectively, of Terra’s North American ammonia and urea capacities.
Terra became a wholly-owned subsidiary of CF Industries Holdings Inc. in April of this year (GM April 19, p. 1) following a year-long merger battle that also involved Agrium Inc. and Yara International ASA. In addition to Terra, CF now owns the approximately three-fourths of TNCLP that was formerly owned by Terra Industries. TNCLP’s major assets include the large ammonia (1,050,000 st/y) and UAN (1,925,000 st/y) plant at Verdigris, Okla., and terminals in Blair, Neb. and Pekin, Ill.
According to Kinder Morgan information, the Blytheville terminal sits on 731 acres and is serviced by truck, rail, and barge, with access to the Mississippi River, the BNSF railroad, and Interstate 55. The facility is less than an hour away from Memphis, Tenn., and has five scales – two liquid, two dry bulk, and one rail.