Yara signs LOI for construction of Burrup TAN plant

Yara signed the LOI with Técnicas Reunidas for the construction of a TAN plant. The contract will be on a lump sum turnkey basis, with an approximate value of US$500 million. The LOI has been approved by the board of Yara and is subject to the approval of the board of Burrup Holdings Pty Ltd. Total project costs are estimated at approximately US$700 million.

The construction contract will, after board approval by Burrup Holdings Pty Ltd., be transferred to Burrup Nitrates, a planned 50/50 joint venture between Yara and Burrup Holdings Pty Ltd. As Yara has a 35 percent ownership in Burrup Holdings Pty Ltd, Yara will own 67.5 percent directly and indirectly of Burrup Nitrates.

The plant will be built adjacent to the Burrup Holdings Pty Ltd. ammonia facility. The location of the new TAN plant will enable it to maximize synergies from competitive feedstock and utilities supplies.

The TAN plant would primarily supply the fast-growing iron ore mining operations in the Pilbara region of Australia. The plant’s proximity to the Pilbara region, together with adjacent ammonia supply, gives it a distinct advantage over other Australian ammonium nitrate suppliers. Yara has an agreement to market the entire output from the plant.

Yara has a long-term offtake agreement from the Burrup ammonia plant. The 65 percent majority stake in the ammonia plant is expected to go up for auction soon to settle the claims against Indian tycoons Pankaj and Radhika Oswal. Yara is expected to be a bidder for that stake.

Técnicas Reunidas is one of the leading international engineering and construction companies, and provides engineering, procurement, and construction of industrial and power generation plants, particularly in the oil and gas production, refining, and petrochemicals sectors. The company recently successfully completed a similar plant in capacity and size in Chile.