Terra Nitrogen Co L P 8-K Terra Nitrogen Company, L.P. reports third quarter results; declares cash distribution

Exhibit 99.1

Terra Nitrogen Company, L.P.
600 Fourth Street
P.O. Box 6000
Sioux City, IA 51102-6000
www.terraindustries.com

NEWS

For immediate release Contact: Joe A. Ewing
(712) 277-7305
jewing@terraindustries.com

Terra Nitrogen Company, L.P. reports third quarter results;
declares cash distribution

Sioux City, Iowa (Oct. 26, 2006)—Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net income of $13.7 million, or $.73 per limited partnership unit, on revenues of $92.0 million for the third quarter ended Sept. 30, 2006. This compares with net income of $17.7 million, or $.94 per unit, on revenues of $111.7 million for the 2005 third quarter. For the 2006 first nine months, TNCLP’s net income was $28.6 million, or $1.52 per unit, on revenues of $306.6 million, compared to net income of $64.4 million, or $3.41 per unit, on revenues of $337.8 million for the 2005 first nine months.

TNCLP also announced a cash distribution for the quarter ended Sept. 30, 2006, of $1.00 per limited partnership unit payable Nov. 27, 2006, to holders of record as of Nov. 9, 2006.

Analysis of results

The profit decline from the 2005 third quarter was due mainly to lower ammonia and nitrogen solutions (UAN) selling prices and lower UAN sales volumes, partially offset by lower natural gas costs. As compared to the prior year, lower average selling prices and lower sales volumes reduced 2006 third quarter revenues $14.4 million and $1.6 million, respectively. Natural gas costs for the 2006 third quarter were $10.8 million less than those of the 2005 third quarter.

The decline in TNCLP’s year-to-date net income was due to higher natural gas costs, lower sales volumes and lower UAN selling prices, partially offset by higher ammonia selling prices. The lower sales volumes were mainly due to fewer planted corn acres and reduced fertilizer application rates in the 2006 first half. TNCLP’s natural gas unit costs for the first nine months of 2006 were 10.6 percent higher than those incurred in the 2005 first nine months. Forward natural gas purchase contracts increased 2006 year-to-date costs by approximately $22.4 million.

One of the two production units at the Verdigris facility underwent a scheduled maintenance turnaround and was successfully returned to production during September.

Forward natural gas position

TNCLP’s forward purchase contracts at Sept. 30, 2006, fixed prices for about 18 percent of its next 12 months’ natural gas requirements at about $7.1 million above the published forward market prices at that date.

About TNCLP

Terra Nitrogen Company, L.P. is a leading manufacturer of nitrogen fertilizer products.

Forward-looking statements

This news release may contain forward-looking statements, which involve inherent risks and uncertainties. Statements that are not historical facts, including statements about TNCLP’s beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements is set forth in TNCLP’s most recent report on Form 10-K and TNCLP’s other documents on file with the Securities and Exchange Commission. TNCLP undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

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Note: Terra Nitrogen Company, L.P. news announcements are also available on Terra Industries’ website, www.terraindustries.com.

(Tables follow)

Terra Nitrogen Company, L.P.
Condensed Consolidated Statements of Income
(in thousands except per-unit amounts)
(unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
Product revenues	$	91,839		$	111,462		$	306,426		$	337,175
Other income		175			277			196			624
Total revenues		92,014			111,739			306,622			337,799
Cost of goods sold		74,415			89,242			263,961			256,898
Depreciation and amortization		2,177			3,145			8,845			11,045
Total cost of sales		76,592			92,387			272,806			267,943
Total gross profit		15,422			19,352			33,816			69,856
Operating expenses		2,226			1,770			6,291			5,939
Interest expenses—net		(525	)		(130	)		(1,124	)		(439	)
Net income	$	13,721		$	17,712		$	28,649		$	64,356
Earnings per limited partnership unit	$	0.73		$	0.94		$	1.52		$	3.41

The amount of net income allocable to the Limited Partners’ interest is based on the Partnership’s net income and the proportionate share of cash distributed to the Limited Partners and the General Partner.

Nitrogen Volumes and Prices

	2006				2005
	Sales		Average		Sales		Average
	Volumes		Unit Price*		Volumes		Unit Price*
Quarter	(000 tons)		($/ton)		(000 tons)		($/ton)
Ammonia		49		301		45		329
UAN		522		125		578		150

	2006				2005
	Sales		Average		Sales		Average
	Volumes		Unit Price*		Volumes		Unit Price*
Year to Date	(000 tons)		($/ton)		(000 tons)		($/ton)
Ammonia		168		367		207		310
UAN		1,521		139		1,655		148

* After deducting outbound freight costs.

Terra Nitrogen Company, L.P.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

	September 30,
	2006		2005
ASSETS
Cash and cash equivalents	$	49,644	$	14,822
Demand deposit with affiliate		—		23,805
Accounts receivable		24,861		36,131
Inventories		25,841		25,108
Other current assets		2,688		35,184
Total current assets		103,034		135,050
Property, plant and equipment, net		75,748		74,250
Other assets		16,241		11,258
Total assets	$	195,023	$	220,558
LIABILITIES
Short-term note and current portion of long-term debt	$	—	$	28
Accounts payable and accrued liabilities		34,366		43,123
Customer prepayments		14,758		17,370
Total current liabilities		49,124		60,521
Long-term liabilities		308		174
Total liabilities		49,432		60,695
PARTNERS’ EQUITY		145,591		159,863
Total liabilities and partners’ equity	$	195,023	$	220,558