CVR Partners, LP is a Delaware limited partnership formed by CVR Energy to
own, operate and grow our nitrogen fertilizer business. We produce and distribute
nitrogen fertilizer products, which are used by farmers to improve the yield
and quality of their crops. Our principal products are UAN and ammonia. All
of our products are sold on a wholesale basis.
We produce our nitrogen fertilizer products at two manufacturing facilities,
which are located in Coffeyville, Kansas and East Dubuque, Illinois. We acquired
the East Dubuque, Illinois facility in April 2016 through our acquisition of
CVR Nitrogen. For a discussion of the East Dubuque Merger, refer to Note 3 ("East
Dubuque Merger") of Part II, Item 8 of this Report. The consolidated financial
statements and key operating metrics include the results of the East Dubuque
Facility beginning on April 1, 2016, the date of the closing of the acquisition.
Our Coffeyville Facility includes a 1,300 ton-per-day capacity ammonia unit,
a 3,000 ton-per-day capacity UAN unit, and a gasifier complex having a capacity
of 89 million standard cubic feet per day of hydrogen. Our gasifier is a dual-train
facility, with each gasifier able to function independently of the other, thereby
providing redundancy and improving our reliability. Strategically located adjacent
to CVR Refining’s refinery in Coffeyville, Kansas, our Coffeyville Facility
is the only operation in North America that utilizes a petroleum coke, or pet
coke, gasification process to produce nitrogen fertilizer. During the past five
years, over 70% of the pet coke consumed by our Coffeyville Facility was produced
and supplied by CVR Refining’s Coffeyville, Kansas crude oil refinery.
We upgrade substantially all of the ammonia we produce at our Coffeyville Facility
to higher margin UAN, which has historically commanded a premium price over
ammonia. Approximately 93% of our Coffeyville Facility produced ammonia tons
were upgraded into UAN in 2016.
Our East Dubuque Facility includes a 1,075 ton-per-day capacity ammonia unit
and a 1,100 ton-per-day capacity UAN unit. The facility is located on a 210-acre,
140-foot bluff above the Mississippi River, with access to the river for loading
certain products. The East Dubuque Facility uses natural gas as its primary
feedstock. The East Dubuque Facility has the flexibility to significantly vary
its product mix. This enables us to upgrade our ammonia production into varying
amounts of UAN, nitric acid and liquid and granulated urea each season, depending
on market demand, pricing and storage availability. Product sales are heavily
weighted toward sales of ammonia and UAN. For the post-acquisition period ended
December 31, 2016, approximately 44% of our East Dubuque Facility produced ammonia
tons were upgraded to other products.
CVR Energy, which indirectly owns our general partner and approximately 34%
of our outstanding common units, also indirectly owns the general partner and
approximately 66% of the outstanding common units of CVR Refining at December
31, 2016. CVR Refining owns and operates a complex full coking medium-sour crude
oil refinery with a rated capacity of 115,000 barrels per calendar day (bpcd)
in Coffeyville, Kansas, a complex crude oil refinery with a rated capacity of
70,000 bpcd in Wynnewood, Oklahoma and ancillary businesses.
4.03% 