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Gulf Coast Ammonia Plans Anhydrous Ammonia Plant in Texas City, Texas

Gulf Coast Ammonia plans to build a world-scale anhydrous ammonia plant in Texas City, Texas.

According to Gulf Coast, “construction capital will be provided by a joint venture of Starwood Energy Group Global and Mabanaft GmbH & Co. The project was initiated by Agrifos Partners in collaboration with its joint venture development partners Mabanaft and Macquarie Capital. As of this closing, GCA is wholly owned by a joint venture of Mabanaft and Starwood Energy.

GCA's state-of-the-art facility will be located within an industrial chemical site in Texas City, Texas and will offer advantageous logistics with deep-water access and pipeline connectivity.

The facility will have a production capacity of approximately 1.3 million tons of ammonia per year and will purchase hydrogen and nitrogen gases as feedstock, providing for significant capital efficiency and reduced air emissions. Construction of the facility will begin in early 2020 with commissioning expected in the first half of 2023.

Oiltanking North America (a sister company of Mabanaft) will own and operate the marine facilities, officials explained. Using industry-leading and proven technology, the facility will be the world's largest single-train ammonia synthesis loop and will raise the bar in terms of the safe and efficient production and storage of ammonia.

Ken Koye, GCA's newly appointed CEO, said, "I am pleased to have played a leading role in advising on the commercial structuring and development of this significant addition to the development partners' business in North America. I look forward to delivering the completed project and associated infrastructure as a safe, reliable and responsible addition to the industrial base in Texas City. This new world-class facility will meet domestic and global demands for nitrogen-based fertilizers to improve crop production and yields to feed the world's growing population, as well as specialty chemical production on the Texas Gulf Coast."

"The facility and associated infrastructure will generate major economic benefits in Galveston County, including more than 40 permanent operations jobs and more than 1,000 construction jobs at peak," Koye added.

Tim Bullock, CEO of Mabanaft, said, "Mabanaft is very excited to be the operating partner of this project. This is a major strategic step for Mabanaft to grow and diversify our portfolio and establish a footprint in chemical growth markets, leveraging our group's network of world-class business partners. The joint venture between Starwood Energy and Mabanaft demonstrates Mabanaft's commitment to investment in North America and, more significantly, a milestone for Mabanaft's entry into the ammonia market backed by an equity-owned asset."

Himanshu Saxena, CEO of Starwood Energy said, "GCA represents Starwood Energy's first investment in a highly contracted downstream / chemical development project. The shale gas revolution and resulting low prices of natural gas have allowed projects like this to benefit from the sustained arbitrage between the value of a global commodity and the cost of a local commodity. We believe that this opportunity provides a uniquely mitigated risk profile and allows us to leverage our expertise of managing complex development projects."

Philipp Pletka, Managing Director of Starwood Energy, added, "We are delighted to partner with Mabanaft in moving this project to construction stage. Once constructed, this will be a premium asset in this market. We look forward to exploring further opportunities in this sector."

Hamza Slimani, Vice President of Agrifos Partners and outgoing CEO of GCA, said, "We are proud to have worked with our development partners, Mabanaft and Macquarie Capital, to bring this project through the development phase and to see construction start. The GCA plant will be an important contributor to the world's supply of ammonia."

Nicholas Gole, Head of Americas Energy Principal Investments at Macquarie Capital, said, "Macquarie Capital is proud to have contributed its global leading infrastructure development capabilities to the structuring of this unique asset. We look forward to exploring further opportunities in the promising North American petrochemical sector." Macquarie Capital acted as co-sponsor, sole equity arranger, sole debt arranger and sole financial advisor on the transaction. Nicholas Gole, Alex Erlikh and Devin Blondes led the transaction, with assistance from Peter Zhu and Brian Callahan on the equity and debt arranging.

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