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In response to reduced supplies of natural gas in Germany, chemical manufacturer BASF is reducing its production of ammonia, a fertilizer feedstock produced from natural gas. Reuters’s Ludwig Burger reports:
Germany’s BASF (BASFn.DE), the world’s largest chemical company, is cutting ammonia production further due to soaring natural gas prices, it said on Wednesday, with potential ramifications from farming to fizzy drinks.
Germany’s biggest ammonia maker SKW Piesteritz and number four Ineos also said they could not rule out production cuts as the country grapples with disruption to Russian gas supplies.
Ammonia plays a key role in the manufacturing of fertiliser, engineering plastics and diesel exhaust fluid. Its production also yields high-purity carbon dioxide (CO2) as a byproduct, which is needed by the meat and fizzy drinks industries.
“We are reducing production at facilities that require large volumes of natural gas, such as ammonia plants,” BASF Chief Executive said in a media call after the release of quarterly results, confirming an earlier Reuters report.
He added BASF would purchase some ammonia from external suppliers to fill gaps but warned farmers would face soaring fertiliser costs next year.
Production lines for raw material syngas, a mixture of carbon monoxide and hydrogen, and basic petrochemical acetylene were also candidates for cutbacks to save on gas, the CEO said.
Unlike many European countries, Germany has no liquefied natural gas (LNG) port terminals to replace Russian pipeline gas. That means companies are under political and commercial pressure to reduce gas intensive activities if gas deliveries are cut further.
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