UPDATED: 04/30/2018 — see Change Log

OWNER: East Dubuque Nitrogen Fertilizers, LLC (CVR Partners LP / CVR Energy Inc)
PROJECT: Nitrogen fertilizer plant[memberful does_not_have_subscription=”1314-ammonia-industry-annual-subscription,1311-ammonia-industry-monthly-subscription,3338-ammonia-industry-30-day-subscription”]

EXISTING PLANT:
COST (reported): $70 million, for 2006 acquisition by Rentech
JOB CREATION (reported): 151 permanent — see Job Openings [LINK]
START-UP DATE (reported): 1965

EXPANSION 2014:
COST (reported): $80 million plus $20 million storage
JOB CREATION (reported): None given
START-UP DATE (reported): 2014

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia	337,000 mtpy	1,075 stpd	[Membership required]	[Membership required]
Units: stpd, stpy, mtpd, mtpy = short/metric tons per day/year. [1] United States Geological Survey (USGS) Mineral Yearbook, Nitrogen gives capacity in metric tons per year, calculated as “engineering design capacity adjusted for 340 days per year of effective production capability,” rounded to three significant digits. Source: most recent year, Table 4: Domestic Producers of Ammonia, http://minerals.usgs.gov/minerals/pubs/commodity/nitrogen/. [2] Company 2016 Q3 earnings announcement. Sources: linked below. [3] [Membership required]. Sources: linked below. [4] [Membership required]. See Methodology.

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SUMMARY STATUS: Operational
The East Dubuque nitrogen plant started up in 1965. Rentech completed expansions of the urea line in 2013 and the ammonia line in 2014. In April 2016, Rentech and CVR Partners merged, and the plant now operates as a subsidiary of CVR. Also in 2016, CVR completed minor expansion work on its ammonia plant.

EXISTING PLANT:
COST: $70 million in 2006, acquisition by Rentech
JOB CREATION: 151 permanent — see Job Openings [LINK]
START-UP DATE: 1965

EXPANSION 2014:
COST: $80 million plus $20 million storage
JOB CREATION: None given
START-UP DATE: 2014
LIKELIHOOD: Done — see Methodology

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia	337,000 mtpy	1,075 stpd		355,957 mtpy
Urea liquid		484 stpd 176,660 stpy		160,263 mtpy
Urea granular		140 stpd 51,100 stpy		46,357 mtpy
Nitric Acid		380 stpd 138,700 stpy		125,827 mtpy
UAN		1,100 stpd 401,500 stpy		364,235 mtpy
Units: stpd, stpy, mtpd, mtpy = short/metric tons per day/year. [1] United States Geological Survey (USGS) Mineral Yearbook, Nitrogen gives capacity in metric tons per year, calculated as “engineering design capacity adjusted for 340 days per year of effective production capability,” rounded to three significant digits. Source: most recent year, Table 4: Domestic Producers of Ammonia, http://minerals.usgs.gov/minerals/pubs/commodity/nitrogen/. [2] Company 2016 Q3 earnings announcement. Sources: linked below. [3] No permit documents available. [4] Adjusted Capacity is in metric tons per year assuming operations for 365 days per year; based on company announcements. See Methodology.

FEEDSTOCK: Natural gas
END PRODUCTS: Ammonia, Urea, UAN, DEF, Nitric Acid, Carbon Dioxide

RESEARCH NOTE:
According to the CVR Partners Q1 2018 earnings call, the East Dubuque “ammonia unit and UAN plant ran at 87%” on-stream rate for the quarter, with “12 days of
unplanned downtime related to a boiler feed water coil leak.”

In August 2015, Rentech Nitrogen Partners and CVR Partners announced that CVR was acquiring Rentech in a cash and stock deal, expected to be complete by the end of 2015.

The nitrogen plant in East Dubuque, IL, was Rentech’s primary asset, which it had purchased in 2006. CVR owned a single ammonia-UAN plant in Coffeyville, KS, which uses pet-coke feedstock.

The merger closed on April 1, 2016, giving CVR Partners “an expanded geographical footprint, diversification of its raw material feedstocks, wider customer reach and greater potential for cash-flow generation.”

Post-merger, CVR is now 34% owned by Rentech’s former shareholders (including Rentech Inc, its former parent company, which owned 59.7% of the publicly traded subsidiary).

In its first consolidated earnings report after the merger, CVR Partners announced minor expansions, resulting from scheduled turnaround work, on the ammonia lines at both East Dubuque and Coffeyville:

“Of significant note is our success with the ammonia expansion at the East Dubuque fertilizer facility. Since installing a new ammonia synthesis converter during the facility’s planned second quarter turnaround, ammonia production levels have averaged over 1,075 tons per day – an increase of more than 15 percent over rates leading into the turnaround …

“While we expect solid farmer demand for the spring, we anticipate a continued impact to nitrogen fertilizer pricing into the first half of 2017 as additional production comes online in the US. Consistent with our 2016 third quarter, our focus remains on operating our plants at high on-stream rates, effectively managing our marketing and logistics and prudently controlling costs.”
CVR Partners, Q3 2016 Earnings Report, 10/27/2016

In January 2014, Rentech had completed an expansion of the ammonia line at East Dubuque, with production running “at a steady rate of approximately 1,020 tons per day,” compared to the previous 830 stpd. In November 2013, a fire in the ammonia synthesis loop had caused a few months delay: the project was originally “anticipated to be completed by the end of calendar year 2013.”

The capital cost was estimated at $80 million – or $100 million total, including $20 million for expansion of storage capacity – with an expected “return on investment in excess of 20%.” The project increased ammonia capacity by “approximately 23%, or 70,000 tons annually, and includes the addition of a 20,000 ton ammonia storage tank,” bringing total ammonia production capacity “to approximately 370,000 tons, and … on-site ammonia storage capacity to 60,000 tons.”

The expansion of the ammonia line followed a $6 million project to increase urea capacity and begin production of DEF. The urea expansion, which came online in 2013, expanded capacity “by 21,900 tons, or 15 percent.” The DEF project, which was ready in 2012, involved “installation of mixing, storage and load-out equipment.” Yara has the “exclusive rights to purchase DEF produced at Rentech Nitrogen’s facility under a long-term agreement based on index pricing and distribute the DEF through its Air1® brand.”

The East Dubuque plant was built in 1964 by Apple River Chemical Company, a subsidiary of Northern Illinois Gas Company, and began operations in 1965.

In 1970, Apple River was purchased by St. Paul Ammonia Products, which, in 1975, merged into N-Ren Corporation.

In 1986, N-Ren filed for Chapter 11 bankruptcy and, in 1987, the East Dubuque plant was auctioned off to an investment group comprising of Sullivan and Proops and Sam Zell’s Great American Management and Investment Corporation, which renamed itself the Vigoro Corporation, in advance of its IPO in 1991. Under this ownership, the East Dubuque plant operated as Phoenix Chemical Company.

In 1996, Vigoro was purchased by IMC Global Inc, and Phoenix Chemical Company became IMC Nitrogen Company. Then, in 1999, IMC Global was purchased by Royster-Clark Inc, which operated the plant as Royster-Clark Nitrogen Inc.

In 2006, Agrium purchased Royster-Clark, but the East Dubuque plant was already being sold to Rentech Energy Midwest Corporation, which planned to convert the plant to run on coal feedstock – the sale went through but the feedstock conversion never happened. In 2011, Rentech established Rentech Nitrogen to operate the plant as a Limited Partnership.

Agrium retained responsibility, however, for marketing and distributing the majority of the plant’s output, through a 2006 agreement. In December 2015, perhaps in preparation for the CVR merger, this agreement was terminated.[/memberful]

View larger map with all ammonia plants.

ADDRESS: 16675 Highway 20 West, East Dubuque, Illinois, 61025, United States

WEBSITE: http://www.cvrpartners.com/
WEBSITE: http://www.cvrenergy.com/

REGULATORY SOURCES:

• USGS: Minerals Yearbook, Nitrogen [RECENT / ARCHIVE]
• EPA Emissions data: Greenhouse Gas Emissions from Large Facilities: RENTECH NITROGEN LLC [LINK]
• Risk Management Plan: Right to Know Network: Rentech Nitrogen, LLC [LINK]
• US SEC regulatory filings: EDGAR Search Results, CVR PARTNERS, LP CIK#: 0001425292 [LINK]
• US SEC regulatory filings: EDGAR Search Results, Rentech Nitrogen Partners, L.P. CIK#: 0001525998 [LINK]

NEWS SOURCES:

• 04/26/2018: Seeking Alpha: CVR Partners Q1 2018 Earnings Call Transcript [LINK]
• 04/26/2018: CVR Partners press release: CVR Partners Reports 2018 First Quarter Results [PDF]
• 10/27/2016: CVR Partners press release: CVR Partners Reports 2016 Third Quarter Results [LINK]
• 04/01/2016: CVR Partners press release: CVR Partners Completes Acquisition of Rentech Nitrogen Partners, L.P. [PDF]
• 04/01/2016: Rentech Inc press release: Rentech, Inc. Retires Senior Obligations, Improves Liquidity, and Directs Focus on its Wood Fibre Assets Following Closing of Rentech Nitrogen-CVR Partners Transaction [PDF]
• 08/10/2015: Rentech press release: CVR Partners, LP to Combine with Rentech Nitrogen Partners, L.P. To Create a North American Nitrogen Fertilizer Leader [LINK]
• 02/17/2015: Rentech press release: Rentech Nitrogen Partners, L.P. Exploring Strategic Alternatives [LINK]
• 01/23/2014: Rentech press release: Rentech Nitrogen Partners, L.P. Completes Compressor-Related Repairs at East Dubuque Facility [LINK]
• 12/17/2013: Rentech press release: Update on East Dubuque Facility [LINK]
• 04/18/2013: Rentech press release: Rentech Nitrogen Expects Recent Financing to Enable Increase in Cash Distributions Beginning in 2014; Proceeds Will Be Used to Fund All Announced Projects [LINK]
• 01/15/2013: Rentech press release: Rentech Nitrogen Announces Completion of Project to Increase Urea Capacity [LINK]
• 08/02/2012: Rentech press release: Rentech Nitrogen Announces Completion of DEF Phase of Urea/DEF Expansion Project [LINK]
• 02/29/2012: Rentech press release: Rentech Nitrogen Secures $100 Million Capital Expenditures Facility and Upsizes Working Capital Facility to $35 Million; Terminates Bridge Loan with Rentech [LINK]
• 01/04/2012: Rentech press release: Rentech Nitrogen’s Ammonia Capacity and Storage Expansions Continue Moving Forward [LINK]
• 04/26/2006: Agrium press release: Agrium Finalizes $70-Million Sale of East Dubuque Nitrogen Facility to Rentech [LINK]
• 03/09/2006: Agrium press release: Agrium and Rentech Move Forward on Sale of East Dubuque Fertilizer Plant [LINK]
• 02/09/2006: Agrium press release: Agrium Acquires 98.6 Percent of Royster-Clark Units [LINK]
• 07/08/1991: Chicago Tribune: Pair Finds Vigor In Fertilizers [LINK]