Terra wins NOx abatement contracts with electricity producers

Sioux City, Iowa, August 9, 2002 — Terra Industries Inc. announced that it has contracted to provide technical services and more than 25,000 tons of nitrogen in the form of anhydrous and aqua ammonia, urea and urea liquor, to electricity producers in 2002.

Terra representatives further stated that they expect this volume to double in 2003, and that they have set a goal to sell more than 150,000 tons to electricity producers and chemical companies in 2005.

This emerging opportunity is in part the result of a 1990 amendment to the Clean Air Act, which requires fossil fuel-based industries such as power and chemical plants to meet certain emissions standards by specified dates.

They do so by installing selective catalytic reduction (SCR) or non-selective catalytic reduction (NSCR) equipment, which uses ammonia to reduce emissions of nitric oxides-NOx. Power and chemical companies are beginning the cleanup process to meet standards that will be mandatory in 2003.

Said Michael Bennett, Terra President and CEO, “Our objective is to seize opportunities that offset the cyclical nature of our agricultural-related earnings stream. While Terra will continue to focus on agricultural sales, we see deeper penetration into this market as promising for its potential contribution to the company’s overall results.”

Terra’s core business is to supply nitrogen fertilizer products to agricultural customers, but the company also sells anhydrous ammonia, methanol, nitric acid, liquid carbon dioxide and urea to industrial customers in North America and the United Kingdom.

“Ag sales are largely seasonal,” noted Joe Giesler, Terra’s Global Director, Industrial Sales. “Industrial sales provide steady product movement and cash flow during the ag off-season, and relieve Terra of total dependence on agricultural markets.

“Terra is uniquely suited to serve this market, either directly or through established distributor networks,” Giesler continued.

“We operate eight manufacturing facilities in North America and the U.K., and our facilities are well-positioned to supply these customers reliably. But Terra brings much more to the table; we have technical expertise in reducing NOx emissions because we use SCR equipment and processes similar to those of our customers in the energy business. Our customers realize a cost advantage by involving Terra in the design and setup of their facilities, and we can provide ongoing technical support in terms of safely storing and handling the products we supply.”

Energy companies contracting with Terra for products and/or services in 2002 are Associated Electric Cooperative, Inc. in New Madrid, Mo.; Wartsila, near Denver, Co.; Detroit Edison in Monroe, Mich.; Dynegy, near St. Louis, Mo.; and Ontario Power Generation in Sarnia, Ont., among others.

Terra Industries Inc., with 2001 revenues of $1 billion, is an international producer of nitrogen products and methanol.

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