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Terra Nitrogen Company, L.P. Message Board

  • hmandad2012 hmandad2012 Aug 7, 2014 9:46 PM Flag

    Turnaround of 50 percent of the complex

    "A turnaround of approximately 50 percent of the complex is anticipated to occur in the first quarter of 2015 and is expected to have an impact on cash available to fund distributions."

    Does anyone have insight into what this means?

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    • TNH, similar to most major manufacturing facilities, does routine maintenance as needed. But every year or 2, they need to close the facility for a few weeks to (1) do major maintenance (that's the turnaround part) and (2) while the plant is down anyway, they also usually do some expansion projects at the same time. The last turnaround was during Q3 of 2013. So it's only about 1 1/2 years since the last one, which is actually pretty quick. Maybe that's why they are only doing a turnaround of half the facility. I don't think TNH discloses exactly how long the turnarounds last, but Q1 is generally slow, so that's why they probably chose this time to do it.

      Like the other poster said, you see the same turnarounds in refinery MLPs and some chemical MLPs, like (formerly) PDH and OCIP. Unless they take much longer than expected, people tend to ignore them. Just expect a lower distribution for Q1 2015 than Q1 2014.

    • I take that to mean one time capital expenditures will impact Qtr 1 2015 dividend payout. It's unclear if/when this would occur again in 2015...

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