CF may invest $2 billion in Peru petrochemical plant

CF Industries Holdings Inc., the fertilizer maker targeted by Agrium Inc. in a hostile takeover bid, may invest as much as $2 billion in a petrochemical plant in Peru, the company's Peru manager said.

Deerfield-based CF plans to produce 1.3 million tons of nitrogen fertilizer annually by 2013 at the plant, Ismael Benavides said today at a press conference in Lima. CF plans to complete plant studies in January and start construction in the second half of 2010, he said.

"This project will give added value to Peru's natural gas and replace imported fertilizers from Ukraine," said Benavides, a former banker and agriculture minister. "With the world's population growing, demand isn't going to be a problem."

CF's project, to be built in the southern port of Marcona, is part of $10 billion in energy investments expected by Peru's Energy Ministry in the next seven years, including petrochemical plants to be built by Sigdo Koppers SA and Braskem SA.

CF yesterday signed a natural-gas supply contract for the petrochemical plant with Argentina's Pluspetrol SA, operator of Peru's Camisea gas fields.

South Korea's SK Group, a partner in the gas fields, is also holding talks with Pluspetrol, Production Minister Mercedes Araoz said yesterday.

CF rose 1.2 percent to $89.99 at 1:31 p.m. in New York Stock Exchange composite trading. The stock has jumped 83 percent this year.

A hostile takeover bid from Calgary-based Agrium won't slow the Peruvian project, Benavides said. CF also has bid for Terra Industries Inc., which rejected the latest takeover offer on Oct. 1.