Norway's Yara curtails ammonia output as gas prices surge - Reuters

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A worker walks at the Yara ammonia plant in Porsgrunn, Norway August 9, 2017. Picture taken August 9, 2017. REUTERS/Lefteris Karagiannopoulos/File Photo

OSLO, Sept 17 (Reuters) - Norway's Yara (YAR.OL) is curtailing ammonia production at a number of plants due to a surge in the price of natural gas, the fertiliser maker said on Friday.

"Record high natural gas prices in Europe are impacting ammonia production margins," Yara said in a statement.

"Including optimisation of ongoing maintenance, Yara will by next week have curtailed around 40% of its European ammonia production capacity," it said.

The world's second largest ammonia producer has a European output capacity of 4.9 million tonnes per year, some 2 million of which will be affected, a company spokesperson said.

Day-ahead gas prices at the Dutch TTF hub, a European benchmark, have more than tripled this year to record levels, driving up power prices as the winter heating season approaches with below-average levels of gas in storage.

Yara will continue to monitor the situation and aims to keep supplying customers but curtailing production where necessary, it said.

Norwegian oil and gas major Equinor (EQNR.OL) on Wednesday said it expected the fundamentals driving the current high gas prices in Europe to remain in place during the autumn and winter seasons.

"It's being pushed by weather anomalies, by general inflation in commodity prices and supply chain bottlenecks..., but mainly the prices are driven by basic fundamentals of tight supply and high demand," Equinor CFO Ulrica Fearn told an energy conference in Oslo. read more

Additional reporting by Nerijus Adomaitis; editing by Raissa Kasolowsky and Jason Neely

Our Standards: The Thomson Reuters Trust Principles.

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