Rentech Nitrogen Partners, L.P. (NYSE: RNF), which manufactures and sells nitrogen fertilizer products including ammonia, urea ammonium nitrate solution (UAN) and ammonium sulfate (AS), today announced that it has completed its previously announced capacity expansion project to increase urea production by 21,900 tons, or 15 percent, at its nitrogen fertilizer facility in East Dubuque, IL. This is an annual increase of 2,650 tons from the previous estimate of 19,250 tons and is based on actual plant operation.
The additional urea tons will be converted into and sold as diesel exhaust fluid (DEF) to Yara North America Inc., and the sales are expected to provide an incremental increase to Rentech Nitrogen’s cash available for distribution beginning in 2013. Yara maintains the exclusive rights to purchase DEF produced at Rentech Nitrogen’s facility under a long-term agreement based on index pricing and distribute the DEF through its Air1® brand. Rentech Nitrogen began supplying Yara with DEF last year when the Partnership installed mixing, storage and load-out equipment for DEF production at its East Dubuque facility.
DEF is a high-purity urea solution composed of de-ionized water and prime urea. As part of the Clean Air Act, the U.S. Environmental Protection Agency has mandated that all on-road diesel vehicles (Class I through Class 8) manufactured on or after January 1, 2010 employ an emissions-reducing engine technology which specifically targets hazardous nitrous oxide (NOx) emissions. The market-leading solution for heavy-duty vehicles to comply with these stricter emissions standards is selective catalytic reduction (SCR), which involves injecting DEF into the exhaust of vehicles and achieves NOx reductions in excess of 90 percent. The Engine Manufacturers Association has estimated the U.S. DEF demand at 50 million gallons in 2010, rising to 750 million gallons in 2015, and 1.3 billion gallons in 2019.
The DEF produced by Rentech Nitrogen is designed to meet the high standards of ISO 22241 specifications to protect engine catalysts.