Norwegian company Yara cuts ammonia production as gas prices rise

A worker walks at the Yara ammonia plant in Porsgrunn, Norway on August 9, 2017. Photo taken on August 9, 2017. REUTERS / Lefteris Karagiannopoulos / File Photo

OSLO, Sept. 17 (Reuters) – Norwegian company Yara (YAR.OL) is cutting ammonia production at several factories due to soaring natural gas prices, the fertilizer maker said on Friday.

“Record prices for natural gas in Europe are impacting ammonia production margins,” Yara said in a statement.

“Including the optimization of continuous maintenance, Yara will have reduced by next week around 40% of its European ammonia production capacity,” he said.

The world’s second-largest producer of ammonia has a European production capacity of 4.9 million tonnes per year, of which around 2 million will be affected, a company spokesperson said.

Daily gas prices at the Dutch hub TTF, a European benchmark, have more than tripled this year to record highs, pushing up electricity prices as the winter heating season approaches with gas levels in below average storage.

Yara will continue to monitor the situation and aims to continue to supply its customers but reduce production if necessary, he said.

Norwegian oil and gas company Equinor (EQNR.OL) said on Wednesday it expected the fundamentals behind the current high gas prices in Europe to remain in place during the fall and winter seasons. winter.

“It’s driven by weather anomalies, general commodity price inflation and supply chain bottlenecks…, but primarily prices are driven by the basic fundamentals of tight supply and high demand, ”Equinor CFO Ulrica Fearn told an energy conference in Oslo. Read more

Additional reports by Nerijus Adomaitis; edited by Raissa Kasolowsky and Jason Neely

Our Standards: Thomson Reuters Trust Principles.

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