Yara acquires Gulf Coast Ammonia plant for $1.3 billion in major U.S. expansion

Yara International has agreed to buy the Gulf Coast Ammonia plant in Texas City, Texas, for $1.3 billion, moving to lock in low-cost U.S. production just days after walking away from a separate ammonia deal on the same coast. The purchase, announced on July 2, hands the world’s largest ammonia trader a 1.3 million tonne facility and marks its most aggressive North American expansion in years.

The deal resets the competitive map for U.S. nitrogen. By taking full ownership of a large single-loop plant on the Gulf Coast, Yara steps directly into a market prized for its cheap natural gas and puts itself head-to-head with domestic leaders CF Industries and Nutrien. The $1.3 billion outlay lifts Yara’s total 2026 capital spending to $2.5 billion.

What Yara is buying at Gulf Coast Ammonia

Yara North America has agreed to acquire the plant from GCA Holdings, an entity affiliated with Lotus Infrastructure Partners and MB Energy, for $1.3 billion plus working capital adjustments. The acquisition covers the ammonia synthesis loop, related storage and exclusive use of the site’s loading infrastructure. The facility carries a nameplate capacity of about 1.3 million tonnes per year and is still in commissioning, with a gradual ramp-up to full, stable operation expected by the end of 2026.

Hydrogen, nitrogen and other utilities will be supplied by Air Products under a long-term contract, drawing on the largest hydrogen pipeline network in the United States. The structure leaves Yara owning the ammonia plant while sourcing feedstock gases externally, mirroring its joint-venture operation at Freeport, Texas, which the company says has delivered strong reliability. Himanshu Saxena, chairman and chief executive of Lotus Infrastructure Partners, described ammonia as “a significant and growing commodity.”

From a Louisiana exit to a Gulf Coast bet

The acquisition follows within days of Yara’s decision to walk away from the Louisiana Clean Energy Complex, where it had been in advanced talks to buy ammonia assets from Air Products under a 25-year low-carbon hydrogen offtake. Yara said the Louisiana returns fell short of its investment criteria and signaled it would redirect that capital to other mature U.S. ammonia opportunities. Gulf Coast Ammonia is that redeployment.

Both transactions keep Air Products central to Yara’s U.S. strategy. Alongside the Texas City deal, Yara confirmed it is finalizing a marketing and distribution agreement with Air Products for renewable ammonia from the NEOM Green Hydrogen project in Saudi Arabia, where Air Products is the sole offtaker of up to 1.2 million tonnes per year.

A bet on cheap U.S. natural gas

Natural gas accounts for the majority of ammonia’s variable production cost, and the Gulf Coast plant gives Yara direct exposure to Henry Hub pricing. The company framed the purchase as a step in diversifying its energy exposure and improving the competitiveness of its global ammonia footprint, reducing reliance on higher-cost European gas. U.S. Gulf producers have long held a structural feedstock advantage over European competitors paying several times more for gas.

The timing is notable. Middle East supply disruptions tied to the Strait of Hormuz have kept ammonia and nitrogen markets tight through 2026, sharpening the strategic value of reliable U.S. Gulf Coast tonnes for both fertilizer and industrial buyers.

Sharper competition with CF Industries and Nutrien

The addition of 1.3 million tonnes gives Yara proprietary Gulf Coast capacity to supply its own fertilizer system and industrial customers rather than leaning on the spot market. Analysts see the move intensifying competition with CF Industries and Nutrien, both of which already benefit from cheap North American gas, and adding to a wave of consolidation along the U.S. Gulf.

On the balance sheet, the acquisition falls within the ammonia capital envelope Yara outlined at its January 2026 Capital Markets Day. The company said the deal lifts its pro forma net debt-to-EBITDA to 1.73 from 1.00 as of the first quarter, which remains within its capital allocation policy, and reaffirmed its target of a BBB/Baa2 credit rating.

Outlook: grey now, low-carbon optionality later

Initial output from Gulf Coast Ammonia will be conventional grey ammonia, but Yara said the site offers a stepwise path to low-carbon production, subject to regulatory developments and financial viability. The near-term test is execution: bringing a plant still in commissioning up to its 1.3 million tonne nameplate by the end of 2026 without the cost overruns that often dog new capacity. Whether Yara can replicate its Freeport reliability at Texas City will determine if the $1.3 billion bet pays off while U.S. gas keeps its edge.