Yara buys Texas ammonia plant for $1.3 billion to expand U.S. production

Yara International's $1.3 billion acquisition of a Texas ammonia plant marks the fertilizer giant's biggest bet yet on low-cost U.S. natural gas as a competitive edge.

Yara International ASA agreed to buy a Texas ammonia plant for $1.3 billion, adding 1.3 million metric tons of annual capacity as the Norwegian fertilizer producer shifts toward lower-cost U.S. natural gas feedstock.

"By bringing this plant into the Yara portfolio, we are strengthening our operational resilience and diversifying our energy costs at a time when supply flexibility matters more than ever," said Svein Tore Holsether, president and chief executive officer of Yara.

The plant in Texas City, Texas, is currently in commissioning and expected to reach its nameplate capacity of 1.3 million metric tons per annum by the end of 2026, with production targeted above that level. Air Products will supply hydrogen and nitrogen under a long-term agreement, mirroring the model Yara already operates at its Freeport, Texas, facility. The deal increases Yara's total 2026 capex to $2.5 billion and pushes pro forma net debt-to-EBITDA to 1.73 from 1.00 at the end of the first quarter.

The acquisition accelerates Yara's strategy of diversifying away from European gas exposure — where prices have historically been higher and more volatile — toward Henry Hub-linked U.S. supply. With the U.S. Department of Agriculture announcing a $500 million Fertilizer Investment and Expansion for Long Term Domestic Supply program just a day earlier, the deal positions Yara to capture both lower input costs and potential federal support for domestic fertilizer production.

A Bet on U.S. Gas Cost Advantage

Yara will acquire the ammonia synthesis loop, related storage, and exclusive rights to loading infrastructure at the Texas City site. The plant's gas supply is tied to Henry Hub pricing through the Air Products contract, giving Yara a structural cost advantage over its European production base, which relies on Dutch TTF natural gas. European ammonia producers have struggled with margin compression since the 2022 energy crisis, when TTF prices surged above $100 per million British thermal units, forcing widespread production curtailments across the continent.

The acquisition includes the plant from Gulf Coast Ammonia, a portfolio company of Lotus Infrastructure Partners and MB Energy. J.P. Morgan Securities LLC advised the sellers in an auction process. Completion is subject to customary regulatory approvals.

Fertilizer Market at an Inflection Point

The deal comes as North American farmers face elevated fertilizer costs alongside slumping crop values. Urea, a key nitrogen fertilizer, traded at its lowest level this year earlier in June, though prices remain elevated relative to pre-pandemic averages. Phosphate prices have risen nearly 30 percent year-to-date as China, a major supplier, restricts exports and a global sulfur squeeze tightens feedstock supply.

Yara's expanded U.S. footprint could help buffer American farmers from supply disruptions. The company has operated in the United States since 1946, employs about 185 people, and runs seven import and distribution terminals. It is also the majority owner of a joint venture operating an ammonia plant in Freeport, Texas — a facility that has delivered strong operational improvements under a similar Air Products supply model.

The Oslo-based company, founded in 1905, operates in more than 60 countries and reported $15.7 billion in revenue in 2025. Yara said the acquisition falls within the ammonia investment budget of $1.2 billion in average annual capex it outlined at its Capital Markets Day in January 2026, and that further growth investments over the period will be limited to selective high-return opportunities.

This article is for informational purposes only and does not constitute investment advice.