The company had previously said it was planning to sell surplus natural gas from a supply contract and had been aiming to raise as much as $608 million from its IPO. But the size of the IPO has been reduced after Burrup Holdings abandoned the gas resale plan, according to The Australian.

Last month, the same newspaper reported that in January West Australian Resources Minister Fran Logan bought gas from Burrup Fertilisers during a supply shortage.

Burrup charged the government-owned electricity generation utility Verve Energy $35 a gigajoule for gas that Burrup is understood to have bought under a long-term contract with Apache for about $1.50 a gigajoule.

But with further gas resales now ruled out, Burrup Holdings expects to raise between $390 million and $502 million through the sale of shares, based on the indicative price range of $1.75 to $2.25.

"The IPO will position Burrup to take advantage of its considerable growth opportunities and utilise its extensive skills in downstream industry to create further shareholder value," chairman and managing director Pankaj Oswal said in a statement.

Burrup's 760,000 tonnes per annum liquid ammonia plant in Western Australia uses gas as feedstock, and is one of Australia's leading domestic gas customers.

The facility began production in 2006 and accounts for about 5% of the world's total output of tradeable ammonia.

Burrup has a 25-year offtake and marketing agreement with Norway's Yara International, which also has a 30% stake in the ammonia producer.

Burrup and Yara have also entered into an agreement to evaluate a feasibility study into the construction of a 350,000 tonnes per year ammonium nitrate plant in WA.

Ammonium nitrate is used to produce explosives and Burrup said the proposed plant's production would probably be purchased by Western Australia's growing mining industry.

Following the IPO, Oswal will own 58% of the listed company, Yara will hold 27%, with new shareholders holding the balance.