Australia's Incitec Pivot expects its new $850 million U.S. ammonia plant will reap bigger profits than first projected, thanks to a recent string of fertilizer takeovers, cheap gas prices and the sliding Australian dollar.

The plant outside New Orleans is expected to start producing in the third quarter of calendar 2016, with all of its output already committed to customers, including Incitec's Dyno Nobel arm in the United States and ammonia trader Trammo.

Weak ammonia prices have found support as some plans for new nitrogen fertilizer capacity have been scrapped following a string of deals in the sector.

"That's actually a positive for our plant because the industry structure is more attractive," Chief Executive James Fazzino told reporters on a conference call from New Orleans.

Last month, farmer co-operative CHS Inc canned plans to build a $3 billion nitrogen fertilizer plant in North Dakota, instead agreeing to buy a stake in CF Industries Holdings Inc's nitrogen fertilizer unit for $2.8 billion and securing a supply deal.

UBS analysts said if the same valuation measures used in the CHS-CF deal were applied to Incitec's Louisiana plant, it would be worth more than A$4 billion.

"It in our view underscores the value of Incitec's Louisiana ammonia project, which in our view is not currently

being valued appropriately at today's share price," UBS analysts said in a report in August.

UBS has a 12-month price target on Incitec of A$5.00, while Macquarie has a target of A$4.40, both well above Incitec's last trade at A$3.55.

The shale gas boom has driven U.S. gas futures NGc1 down to around half the $5.50 per million British thermal units price they were at when Incitec approved the project three years ago, while the Australian dollar has dropped 30 percent against the U.S. dollar, which will boost the value of the unit's earnings when they are converted in its accounts.

Ammonia is a key ingredient for nitrogen fertilisers as well as explosives used in mining, quarrying and construction, and it is a base for other industrial chemicals.