ILLINOIS, March 12, 2026 - Liquefied natural gas (LNG) has become a critical pillar of global fertilizer production, as the manufacturing of urea-the world's most widely used nitrogen fertilizer-depends heavily on natural gas as both a chemical feedstock and energy source. The link between energy markets and fertilizer supply matters for agriculture because natural gas prices directly influence fertilizer availability, farm input costs, and ultimately global food production.

Urea contains about 46% nitrogen, making it one of the most efficient fertilizers for major crops including wheat, corn, rice, and many horticultural products. But behind each ton of urea lies an energy-intensive industrial process powered largely by methane, the main component of natural gas. The production of urea begins with ammonia, the building block for nearly all nitrogen fertilizers. Ammonia itself is created by combining hydrogen and nitrogen.

Nitrogen is easily extracted from the air, but hydrogen must be produced through industrial processes. In modern fertilizer plants, that hydrogen typically comes from natural gas through a process known as steam methane reforming. During this stage, methane reacts with steam at temperatures of 800-900°C, producing hydrogen and carbon monoxide. A subsequent chemical reaction converts carbon monoxide into carbon dioxide, generating even more hydrogen.

By the end of this phase, fertilizer plants have produced two essential components:

• Hydrogen, used to synthesize ammonia

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• Carbon dioxide, later used to create urea

Unlike other fuels used in industry, natural gas becomes part of the fertilizer's chemical structure, not just the energy source powering the process.

Once hydrogen is available, it is combined with nitrogen through the Haber-Bosch process, one of the most significant industrial innovations of the 20th century. This reaction occurs under extreme conditions:

• Temperatures of 450-500°C

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• Pressures between 150 and 250 bar

The result is ammonia (NH), the base material used to produce urea and several other nitrogen fertilizers. While ammonia can be applied directly to crops, it is difficult to store and transport safely. As a result, most ammonia is converted into urea, which is easier to handle, ship, and distribute worldwide.

The final stage of production combines ammonia with carbon dioxide generated earlier in the plant. The reaction produces ammonium carbamate, an intermediate compound that later decomposes into urea and water. After purification and processing, the product is transformed into solid granules or prills, the forms most commonly sold to farmers.

Modern fertilizer plants operate as integrated chemical systems, where each stage of the process supplies key inputs for the next. Natural gas has become the primary feedstock for ammonia and urea production worldwide due to several advantages:

• High hydrogen content, making it efficient for hydrogen extraction

• Cleaner combustion, enabling better temperature control in plants

• Compatibility with integrated fertilizer production systems

Today, around 70% of global ammonia production relies on natural gas.

In a typical ammonia plant:

• 70-80% of natural gas is used as chemical feedstock

• 20-30% is used as fuel to power high-temperature reactions

This dual role makes natural gas indispensable to fertilizer manufacturing. Ammonia and urea manufacturing rank among the most energy-intensive processes in the chemical industry.

Producing one metric ton of ammonia requires roughly 28-33 million British thermal units (MMBtu) of natural gas. Because urea production depends on ammonia, the price of natural gas has a direct impact on fertilizer costs. In many facilities, natural gas accounts for 60-80% of total production costs.

This explains why fertilizer plants are often located in regions with abundant and inexpensive gas supplies, such as the United States, the Middle East, and Russia.

Not every country has access to large domestic gas reserves. For many nations, LNG imports are essential to sustain fertilizer production. LNG is natural gas cooled to -162°C, transforming it into liquid form and reducing its volume by about 600 times. This allows gas to be transported across oceans by specialized tankers.

After arriving at import terminals, LNG is regasified and delivered through pipelines to industrial users, including fertilizer plants. Major fertilizer-producing countries that rely heavily on LNG imports include:

• India

• Japan

• South Korea

• Several European nations

Because natural gas represents the largest cost component in fertilizer production, LNG price swings can significantly influence global fertilizer markets.

When gas prices fall:

• Fertilizer production costs decline

• Plants operate at higher capacity

• Fertilizer availability increases

However, sharp increases in LNG prices can make fertilizer manufacturing economically unsustainable. During the 2021-2022 global energy crisis, soaring natural gas prices forced multiple European fertilizer plants to reduce output or temporarily shut down, highlighting the sector's dependence on energy markets.

The cost of producing urea varies significantly depending on access to natural gas.

Low-cost producers

• Middle East

• United States

• Russia

Moderate-cost producers

• China

• Southeast Asia

Higher-cost producers

• Europe

• LNG-dependent economies

These disparities explain why international fertilizer trade is substantial, with gas-rich regions exporting large volumes of urea to countries where domestic production is more expensive. Because nitrogen fertilizers are essential for modern agriculture, energy security and food security are closely connected.

Disruptions in LNG shipping routes, geopolitical tensions, or supply constraints in major gas-exporting regions can quickly affect fertilizer availability. Key maritime routes such as the Strait of Hormuz and the Suez Canal play a critical role in transporting LNG shipments that ultimately sustain fertilizer production.

Looking ahead, policymakers and researchers are exploring green ammonia, produced using hydrogen generated from renewable electricity through water electrolysis. While promising, the technology remains significantly more expensive than natural gas-based production, limiting large-scale adoption. For now, natural gas-and increasingly LNG-remains the foundation of global nitrogen fertilizer manufacturing.

Urea fertilizers are central to feeding a growing global population, but their production remains deeply tied to natural gas and LNG supply. From hydrogen extraction to ammonia synthesis and urea formation, energy markets influence every stage of fertilizer manufacturing. As a result, fluctuations in LNG availability and price will continue to shape fertilizer costs, crop yields, and food security worldwide.