Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: You're only a couple of months away from having some blue ammonia to sell out of Beeville, do you have any offtake lined up for this as of yet? A: Bert Frost, Executive Vice President - Sales, Market Development and Supply Chain: Yes, we have agreements in place for when the product is available. These are structured for growth and tied to exports to Europe and other locations, as well as some industrial contracts. We anticipate demand to grow as the product becomes available.
Q: Is the Air Products project in Ascension Parish a potential project you might be interested in? A: W. Anthony Will, President, Chief Executive Officer, Director: No, we are not interested in that project. The hydrogen producer is looking to earn a return risk-free, which results in high operating costs. We prefer not to deploy capital against noncompetitive assets.
Q: Can you provide clarity on JERA's option to reduce their stake in the Blue Point JV and its impact? A: W. Anthony Will, President, Chief Executive Officer, Director: We expect JERA to maintain their 35% ownership. If they opt to reduce, we are comfortable with that, as it would only increase our ownership to 55%. The economics are attractive, and we have options for the additional tonnage.
Q: How do you see the nitrogen market evolving, especially with the current tight supply-demand balance? A: Bert Frost, Executive Vice President - Sales, Market Development and Supply Chain: The market is positive, with low inventories and high demand. We expect the global nitrogen industry conditions to remain constructive into the second half of the year, with strong demand and tight availability.
Q: How are you mitigating potential capital inflation for the Blue Point project? A: W. Anthony Will, President, Chief Executive Officer, Director: We are using modular construction, which reduces on-site construction content and inflationary pressures. The modules are constructed on a fixed price basis, minimizing the risk of cost overruns.
Q: How do you view the intermediate to long-term nitrogen cost curve and its impact on free cash flow conversion? A: W. Anthony Will, President, Chief Executive Officer, Director: The US remains one of the lowest cost regions for gas production. We expect this to continue, supporting our free cash flow conversion and ability to buy back shares while facilitating CapEx updates.
Q: How do you plan to report Blue Point within your financials? A: Gregory Cameron, Executive Vice President and Chief Financial Officer: We will consolidate the entire entity into our financials, with revenue and costs reported in the ammonia segment. We will provide clarity on the legacy business and JV through footnotes and disclosures.
Q: What type of offtake agreements are you looking for with Blue Point? A: W. Anthony Will, President, Chief Executive Officer, Director: We are not looking to pre-contract the entire production volume. Historically, we've achieved better returns by allowing flexibility in the marketplace rather than locking in prearranged offtake agreements.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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