Terra mothballs Donaldsonville ammonia plant, enters into ammonia purchase agreement

04-May-2005

Terra Industries Inc. announced that it has mothballed its Donaldsonville, La., ammonia plant indefinitely. The ammonia plant, which has an annual production capacity of approximately 500,000 tons, last operated on Dec. 23, 2004. As the Donaldsonville facility's other manufacturing plants were previously shut down, the mothballing of the ammonia plant completes the transition from an integrated manufacturing facility to a facility used solely as a storage and distribution terminal.

Terra also announced that it has entered into an agreement to purchase ammonia for delivery to Donaldsonville from Yara, a major international ammonia manufacturer. The agreement's required purchase quantities are about the same as the mothballed plant's manufacturing capacity. The agreement is for an initial three-year term, with automatic renewal periods beginning every two years thereafter.

"High, volatile natural gas prices make it uneconomical to keep the Donaldsonville ammonia plant on standby, said Michael L. Bennett, Terra's President and CEO. "We are pleased to have secured a competitive ammonia supply contract to replace the manufactured ammonia and believe the Donaldsonville facility's storage and distribution capabilities will enable Terra to seamlessly supply our customers, as well as provide future strategic opportunities."

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