Upload
martin-alberto
View
217
Download
0
Embed Size (px)
Citation preview
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
1/30
CRUs Breakfast BriefingNorth American Nitrogen Investment
Alistair Wallace, Senior Consultant
IFA Chicago, May 2013
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
2/30
22
North American Nitrogen Investment
Why North America?
How much?
What does it mean for imports?
Case study: Mosaic Faustina
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
3/30
33
Extensive shaleplays
Regulatoryincentives and
mineral rights tolandowners
Weakenvironmental
legislation
Existinginfrastructure
and watertreatment
Stableinvestment
environment
What enabled the US Shale Boom?
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
4/30
4
In the US high natural gas prices
resulted in a surge of domestic shale gas
drilling...
0
1
2
3
4
5
6
7
0
1
2
3
4
5
6
7
8
9
2000
2002
2004
2006
2008
2010
2012
Tc
f
US$
/GJ
Henry Hub Gas Price
Wellhead Price
Shale Gas Production
0
1
2
3
4
5
6
7
8
9
0
500
1000
1500
2000
2500
2000
2002
2004
2006
2008
2010
2012
US$/GJ
RigCo
unt
Rig Count Gas Price
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
5/30
5
...which was helped along by a highly
developed conventional gas industry...
Unconventional (red) and Conventional (blue) Natural Gas Basins
Marcellus
Barnett
and
Woodford
Barnett
Baxter,
Mancos,
Cane Creek
Mowry, Gammon and Baken
Fayetteville
Excello/Mulky
New Albany
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
6/30
6
...and by a favourable
development environment
Incentives for private landowners
favourablemineral ownership laws
Free and responsive market access stemming
from a long history of natural gasproduction, distribution and use
Mature and competitive service industry shale
gas technology development is not at a standstill
Extensive pipeline infrastructure proximal to
both conventional and unconventional resources
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
7/30
7
The US shale gas revolution hasrejuvenated US producers margins
7
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
0
100
200
300
400
500
600
Jan-1995
Jan-1996
Jan-1997
Jan-1998
Jan-1999
Jan-2000
Jan-2001
Jan-2002
Jan-2003
Jan-2004
Jan-2005
Jan-2006
Jan-2007
Jan-2008
Jan-2009
Jan-2010
Jan-2011
Jan-2012
Henry hub(US$/MMBtu)US$/tonne
Site costs
Margins
Closures and mothballing
Henry hub price
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
8/30
88
0
50
100
150
200
250
300
350
400
450
500
0
5,
000
10,
000
15,
000
20,
000
25,
000
30,
000
35,
000
40,
000
45,
000
50,
000
55,
000
60,
000
65,
000
70,
000
75,
000
80,
000
85,
000
90,
000
95,
000
Site cash costs(US$/tonne)
2012 Urea Production (million tonnes)
The North Americans have movedsignificantly down the curve since 2008
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
9/30
Country WACC
China 8.2%
USA 9.1%
Brazil 10.0%
Eastern Europe 11.0%
India 11.5%
Russia 12.3%
Qatar 12.8%
Egypt 13.5%
Nigeria 15.1%
WACC for DCF model
9
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
10/30
10
Results of the DCFanalysis
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
11/30
1111
North American Nitrogen Investment
Why North America? How much?
What does it mean for imports?
Case study: Mosaic Faustina
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
12/30
1212
US Nitrogen: 21st Century Gold Rush?
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
13/30
13
Over 5.0 million tpy of new grossammonia capacity for $7.5 billion
13
Plant Type Gross ammonia Net ammonia Gross urea CAPEX* Start up
OCI Beaumont Restart 250 250 -- -- 2012
PCS Geismar Restart 449 241 -- -- 2013
RenTech Nitrogen Debottleneck 332 225 185 0.1 2014
Dyno, Waggaman Greenfield 750 100 -- 0.8 2015
Agrium Redwater Debottleneck 55 -- 170 0.2 2015
Mosaic Faustina Brownfield 720 720 -- 0.7 2016
CF Donaldsonville Brownfield 1,090 394 1,200 2.1 2016
OCI Iowa Greenfield 726 303 730 1.4 2016
Agrium Borger Debottleneck 490 -- 640 0.5 2016
CF Port Neal II Brownfield 750 -- 1,200 1.7 2016
Yara Belle Plaine II Brownfield 750 46 1,300 0.7 2017
Totals 5,218 2,110 5,425 7.4 --
*US$ billions
*Note, Net ammonia has been estimated for some plants
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
14/30
14
Over 5.0 million tpy of new grossammonia capacity for $7.5 billion...
14
5,000
7,000
9,000
11,000
13,000
15,000
17,000
19,000
2012
2013
2014
2015
2016
2017
2018
2019
2020
'000 N tonnes
Greenfield Brownfield Debottlenecking/Restart Current Total N Demand
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
15/30
15
...and if everything being planned getsbuilt,
15
5,000
7,000
9,000
11,000
13,000
15,000
17,000
19,000
2012
2013
2014
2015
2016
2017
2018
2019
2020
'000 N tonnes
Greenfield Brownfield Debottlenecking/Restart Current Capacity Total N Demand
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
16/30
1616
North American Nitrogen Investment
Why North America? How much?
What does it mean for imports?
Case study: Mosaic Faustina
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
17/30
17
In our base-case scenario we expectover 3.0 million tpy of new solid urea
17
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
'000 tonnes
Expected Capacity Urea Imports 2012 Import level
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
18/30
18
Some Canadian and Arabian Gulfexporters likely to continue imports
18
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
19/30
19
Expansions from CF and OCI will movethe US close to self sufficiency...
19
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
'000 tonnesExpected capacity UAN Imports 2012 Import Level
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
20/30
20
...likely pushing out European, FSU andeven Trinidadian imports.
20
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
21/30
21
Mosaic, Dyno, CF and OCI look likely toadd over 2 million tpy of merchant NH3
21
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
'000 tonnes
Expected Capacity Ammonia Imports 2012 Import Level
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
22/30
22
New ammonia capacity in Lousianalooks likely to squeeze out FSU imports
22
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
23/30
2323
North American Nitrogen Investment
Why North America?
How much?
What does it mean for imports?
Case study: Mosaic Faustina
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
24/30
24
A
24
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
25/30
0
100
200
300
400
500
600
0
300
600
900
1200
1500
1800
2100
2400
2700
3000
3300
3600
3900
4200
4500
4800
5100
5400
5700
6000
6300
6600
6900
7200
7500
7800
8100
8400
8700
9000
US$/tonne Other US Mosaic Tampa FOB
PCSCF Industries Miss-
Phos
25
US DAP site cash costs: 2012
25
BartowNew WalesRiverview
Faustina
PCS CF Industries
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
26/30
26
Mosaic Faustina: Ammonia cash costs
26
Year 2012 2017
Gas price to plant US$/GJ 3.02 5.46
Gas conversion efficiency GJ/tonne 31.75 31.75
Train capacity tpd 3000 3000
US operational days days 345 345
Train operating rate % 90% 90%
Ex-works Cash Cost
Feedstock cost US$/tonne 95.9 173.4
Labour US$/tonne 4.3 4.8
Electricity US$/tonne 1.7 1.8
Consumables US$/tonne 3.4 3.8
Working capital US$/tonne 2.9 3.3
Maintenance & Sust Capital US$/tonne 13.8 16.8
Total site cost US$/tonne 122.0 203.8
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
27/30
27
US DAP cash costs: 2017 (leveragingexpanded ammonia cap. at Faustina
27
0
100
200
300
400
500
600
0
300
600
900
1200
1500
1800
2100
2400
2700
3000
3300
3600
3900
4200
4500
4800
5100
5400
5700
6000
6300
6600
6900
7200
7500
7800
8100
8400
8700
9000
US$/tonne Other US Mosaic Tampa FOB
Faustina
CF Industries
BartowNew WalesRiverview
Miss-Phos
PCS
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
28/30
28
This is the global curve in 2017 withMosaic purchasing merchant NH3
28
0
100
200
300
400
500
600
700
0 10 20 30 40
Site cost(US$/tonne)
DAP Capacity (million tonnes)
Global site costs (non-Mosaic) Mosaic (weighted avg.) Tampa FOB
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
29/30
29
...and with Mosaic leveraging NH3production at Faustina?
29
0
100
200
300
400
500
600
700
0 10 20 30 40
DAP site Cost(US$/tonne)
DAP Capacity (million tonnes)
Global site costs (non-Mosaic) Mosaic (weighted avg.) Tampa FOB
7/27/2019 AW - IfA Breakfast Briefing 2013 - North American Nitrogen Investment
30/30
Thank you for your attentionQuestions? 30