Permian Petrochemical Corporation (“PPC”) plans to build a urea plant in the middle of the Permian Basin in southeast New Mexico.  PPC seeks to take advantage of low cost, locally sourced feedstock, as well as various synergies and logistical advantages resulting from locating a petrochemical plant in the middle of the oilfield.

Low-cost feedstocks, favorable pricing and regional demand form a favorable environment to build a “blue” urea plant[1] in the Permian Basin.  Environmental benefits not available to other sites, such as recycling CO₂ and use of waste heat to treat produced water, give the plant an environmental advantage as compared to new plants announced on the Gulf Coast.

There are no urea plants located in the Southwest portion of the United States (“US”).  In fact, PPC’s plant will be the furthest south and west in the US.

PPC expects that the plant will manufacture 600,000 metric tons (“MT”) of “blue” urea per year.  The urea produced will be marketed for agricultural purposes in the Southwest (primarily in West Texas, New Mexico, Arizona, California and markets in Northern Mexico) where urea is currently imported from other regions.  Given high regional demand, production capacity can be doubled in a capital-efficient manner at a later date.

[1] “Blue” urea is urea produced that sequesters CO₂, a high-volume byproduct of ammonia production.