Building on Our Trinidad Asset to Minimize Volatility

Our nitrogen strategy has two components. First, we seek to enhance our overall strategy of growth with reduced volatility by maximizing our Trinidad production with its advantageous natural gas costs. Our second goal is to maximize our stable US industrial sales.

Margin volatility due to natural gas costs has historically affected how we operate our US plants. When US gas is high priced, we may reduce operating rates and purchase product to meet customer commitments. However, with today's strong demand and pricing environment and with more stable US gas prices, each facility produced the combination of products that provided the highest overall nitrogen segment gross margin. For example, we used our nitrogen solutions production capability at Geismar in 2007 to meet market demand and attain favorable margins.

Over the longer term, we would consider strategic partnerships that leverage our marketing and operations expertise in low-cost natural gas regions, doing so on a fee basis and minimizing up-front investment risk.