Terra announces ammonium nitrate supply agreement with Orica
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Terra Industries Inc. announced that it has entered into a 10-year, renewable agreement to supply industrial grade ammonium nitrate (IGAN) and ammonium nitrate solution (ANS) to Orica USA Inc (Orica).
Orica will provide technology and other support to Terra as Terra modifies the smaller of its two Yazoo City, Miss., ammonium nitrate (AN) towers, which is currently limited to converting ANS to agricultural grade AN, a prilled, dry fertilizer product. When modifications are complete, the tower will be equipped to convert ANS to either agricultural grade AN or IGAN, a prilled, low-density, industrial grade product. Orica will have exclusive rights to the converted tower's IGAN production.
Terra has committed to begin supplying Orica with ANS at the commencement of the agreement and will supply IGAN when the tower modifications are complete in September 2006. By 2008, the supply of ANS and IGAN to Orica will account for up to 50 percent of the Yazoo City facility's ANS capacity. Terra estimates the tower modifications will cost $10 million.
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