Yara International acquires Gulf Coast Ammonia plant

Key highlights

• The acquisition demonstrates execution of Yara's strategy to diversify its energy exposure and enhance the competitiveness of its global ammonia production footprint.
• Yara will own the ammonia plant with an expected nameplate capacity of 1.3 million tpy, with Air Products supplying the industrial gases to Yara as part of a long-term supply agreement.
• Yara will utilise its midstream ammonia platform to supply both external customers and its own internal sourcing needs.
• The plant is currently in commissioning and is anticipated to continue ramping up towards full production and stable operations by end of 2026, with production targeted at above nameplate capacity.
• Yara’s investment strategy views the US as highly attractive, reinforcing its long-time presence as a reliable provider of crop nutrition solutions and producer of ammonia.

"By bringing this plant into the Yara portfolio, we are strengthening our operational resilience and diversifying our energy costs at a time when supply flexibility matters more than ever. This addition of US production capacity supports our long term strategy of diversifying our energy exposure, capturing economies of scale, and lowering both fixed costs and capital per tonne. With a century of experience and a proven commitment to safety across our operations, sales, and distribution networks in over 60 countries, Yara will contribute to reliable supply across critical value chains, in the US and beyond," said Svein Tore Holsether, President and CEO.

Strengthening Yara's competitiveness

The acquisition demonstrates execution of Yara's strategy to diversify its energy exposure through value-accretive, disciplined investments that improve competitiveness and support long-term earnings expansion.

Yara will utilise its midstream ammonia platform to supply both external customers, and its own internal sourcing needs. This further strengthens Yara's ability to serve its fertilizer production system and key industrial customers with reliable ammonia supply.

The acquisition includes the ammonia synthesis loop and related ammonia storage and exclusive use of loading infrastructure. Hydrogen and nitrogen supply, along with other utilities, are supplied through a long-term contract with Air Products, which owns and operates the largest hydrogen pipeline network in the US. This contributes to Yara's strategic priority of gas diversification, with a significant increase of US gas exposure (Henry Hub). The set-up is similar to Yara's operations in Freeport, Texas, where a comparable model combined with Yara's ammonia expertise has supported strong operational improvements and consistently high performance.

The plant has been completing outstanding work toward a gradual ramp-up to its 1.3 million t nameplate capacity and stable operations, currently anticipated by the end of 2026. Yara brings a century of experience in ammonia production to this acquisition and will work together with Air Products to improve plant reliability and performance, targeting production to or beyond nameplate capacity. Following a comprehensive technical due diligence, Yara confirmed the GCA plant's potential to become one of the most efficient and profitable assets in the global portfolio, strengthening Yara's position on the global ammonia cost curve.

Yara's flexible system enables multiple pathways for profitable decarbonisation. Yara and Air Products extend their collaboration through this acquisition, and through finalising the previously announced marketing and distribution agreement for renewable ammonia from the NEOM Green Hydrogen plant in Saudi Arabia. In addition, the set up in GCA presents opportunities for a flexible, step-wise entry to low-carbon ammonia, subject to regulatory development and financial viability.

Financial impact and capital discipline

The US$1.3 billion consideration increases Yara's total capex outlay for 2026 to US$2.5 billion and is within the expected capex allocated for ammonia investments 2026 - 2030 at the company’s Capital Markets Day in January 2026. As of 1Q26, Yara reported a strong balance sheet with Net debt/EBITDA1 of 1.00. This acquisition implies a pro forma Net Debt/EBITDA1 of 1.73 including dividend payment made in May, remaining within the limits of Yara's capital allocation policy.

Yara reiterates its capital allocation framework for 2026-2030 targeting average annual capex spend of 1.2 BUSD in real terms, strict capital discipline and shareholder returns in line with its dividend policy. While this acquisition brings forward part of the anticipated growth capex for the next years, it also accelerates the associated cash flows from new ammonia capacity. Further growth investments over the period will be limited and focused on selective high return opportunities.

Parallel to executing its strategic priorities through this acquisition, Yara remains focused on its improvement to strengthen cash flow and maintain balance sheet robustness, while continuing to deliver attractive shareholder distributions. Yara remains committed to its capital allocation policy based on an overall objective of maximising value creation for shareholders and maintaining a BBB/Baa2 credit rating, with a targeted capital structure consisting of a mid-to-long term net debt/EBITDA1 excluding special items rate of 1.5 - 2.0 and a net debt/equity1 ratio below 0.60.

Following completion of the acquisition, Yara has stated that its immediate priority will be commissioning the GCA plant while delivering on its previously announced EBITDA1 improvement targets. With its resilient, future-ready business model, Yara can be well positioned to deliver strong shareholder returns today and in the future.

Sellers offered the plant for sale pursuant to an auction process, facilitated by J.P. Morgan Securities LLC who acted as financial advisor to GCA Holdings, LLC in connection with the transaction. Completion of the acquisition is subject to customary closing conditions, including receipt of relevant regulatory approvals.

Read the article online at: https://www.worldfertilizer.com/environment/03072026/yara-international-acquires-gulf-coast-ammonia-plant/