UPDATED: 10/03/2017 — see Change Log

OWNER: Gulf Coast Ammonia LLC (Agrifos Partners LLC / Borealis AG)
PROJECT: Brownfield Ammonia plant[memberful does_not_have_subscription=”1314-ammonia-industry-annual-subscription,1311-ammonia-industry-monthly-subscription,3338-ammonia-industry-30-day-subscription”]

COST (reported): Not announced
JOB CREATION (reported): Not announced
START-UP DATE (reported): 2019

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia		None given	[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 has not announced project capacity. [3] [Membership required]. No air permit data yet available. [4] [Membership required]. See Methodology.

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SUMMARY STATUS: Planning Phase
In May 2015, Agrifos and Borealis announced their agreement to develop a “world-scale” ammonia plant, for start-up in “early 2019.” Work has yet to begin, so that schedule is implausible. The location was never specified, but was to be on the Gulf Coast, Texas. The plant was going to use hydrogen feedstock. Borealis intended to have a significant equity stake and a long-term off-take contract for 40% of the ammonia.

COST: Not reported, estimate ~$750 million
JOB CREATION: Not reported
START-UP DATE: 2021, originally “early” 2019
LIKELIHOOD: Unlikely — see Methodology

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia		None given		800,000 mtpy estimate
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 has not announced project capacity. [3] No air permit data yet available. Sources: linked below. [4] Adjusted Capacity is in metric tons per year assuming operations for 365 days per year; based on description of scale and similar projects. See Methodology.

FEEDSTOCK: Hydrogen
END PRODUCTS: Ammonia

RESEARCH NOTES:
In May 2015, Borealis and Agrifos announced a “preliminary agreement” to develop Gulf Coast Ammonia LLC (GCA), a “world-scale” ammonia plant in Texas. The project, which the announcement told us has been in development since 2012 and had a proposed “start-up in early 2019,” was subject to final approval by Borealis’s board.

By October 2017, there have been no further announcements, either from Agrifos or from Borealis. While the project may still be in development, the earliest plausible start-up date would be in 2021 or beyond.

Although the announcement gave no information about how much ammonia GCA will produce, I estimated capacity to be around 800,000 metric tons per year, based on similar projects.

In November 2012, an Agrifos subsidiary called Pasadena Nitrogen LLC had announced plans to build an ammonia plant on the 350 acres it owned, adjacent to the ammonium sulfate plant that Agrifos had just sold to Rentech Nitrogen. When I established this website, I found no evidence of progress on Pasadena Nitrogen, assumed the project was dormant, and omitted it from my database – it has been over 2.5 years since Pasadena Nitrogen’s original announcement, but the new partnership with Borealis implies this project has momentum again.

GCA has not announced a location yet, only describing an “existing chemical site [with] existing infrastructure and excellent logistics capabilities.” GCA is in “final negotiations with short list of strategic site owners.”

My original assumption was that this short list would include Agrifos itself, with its former Pasadena Nitrogen site adjacent to Rentech. The Pasadena site would have made some sense: Rentech purchases about 150,000 short tons of ammonia per year (155,000 tons in 2014, 128,000 tons in 2013, according to Rentech’s 2014 Annual Report). This raw material currently comes by barge from OCI Beaumont, at a price linked to the Tampa Index.

Additionally, following the August 2015 announcement that Rentech will merge with CVR Partners, Rentech’s Pasadena site was put up for sale, and, in March 2016, was sold to Pasadena Commodities International, “an affiliate of Interoceanic Corporation (IOC), who is the plant’s long-time distributor for ammonium sulfate.” The Rentech-CVR merger closed in April 2016. Rentech’s 2014 Annual Report had mentioned that it was “evaluating opportunities to build terminalling assets on the site of our Pasadena Facility. We do not expect to invest significant amounts of our own capital in such assets, but expect to work with a joint venture partner on any such development.” Such a development would certainly improve the logistics for a world-scale ammonia plant.

However, Agrifos reps confirmed to me via e-mail that the Pasadena site was not on the short list for GCA.

The GCA plant will not use natural gas as a feedstock; instead it will receive hydrogen directly. This will significantly reduce the total project cost, by avoiding the need for steam-reforming and clean-up processes on site. This approach follows BASF-Yara’s proposed joint venture ammonia plant in Freeport, TX, roughly 60 miles away. I base my cost estimate for the GCA plant on the original BASF-Yara cost: $750 million (although BASF-Yara later reduced this to $600 million). No feedstock supply contract has yet been announced.

Borealis’s press release also said that the unannounced site’s infrastructure and logistics allow GCA to “supply to a variety of long-term off-takers and customers.”

Borealis itself intends to enter into a long-term off-take agreement for 40% of GCA’s output – helping to meet its “goal to sell 10 million tons of nitrogen-based fertilizer products per year by 2020.” Borealis currently runs a number of ammonia plants in France (purchased from GPN, a subsidiary of Total, in 2012) and Austria, and distributes about 5 million tons of fertilizer per year, primarily across central and eastern Europe, through Borealis L.A.T. (formerly Linzer Agro Trade).

Borealis “contemplates significant equity participation” in GCA, and I believe the company would find it easy to raise this capital if it chose to do so. As I understand it, Borealis is more or less owned by Abu Dhabi, through the International Petroleum Investment Company (IPIC), which owns roughly 73% of the company (specifically, Borealis is owned 64% by IPIC and 36% by OMV – but OMV is owned 24.9% by IPIC, so … ). The project debt will be arranged by Macquarie Capital.

Agrifos describes itself as “a group of privately owned fertilizer development companies,” with a number of active projects beyond GCA. Baobab Mining and Chemicals is a phosphate mine in development in Senegal, JDC Phosphate has a “disruptive new” phosphoric acid production technology, and Minemakers is an Australian phosphate miner – as far as I can tell, these subsidiaries and investments are all intertwined with each other, both strategically and financially.[/memberful]

View larger map with all ammonia plants.

ADDRESS: Texas, United States

WEBSITE: http://www.agrifos.com/gca/
WEBSITE: http://www.borealisgroup.com/

REGULATORY SOURCES:

• USGS: Minerals Yearbook, Nitrogen [RECENT / ARCHIVE]

NEWS SOURCES:

• 03/14/2016: Rentech press release: Rentech Nitrogen Announces Sale of Pasadena Facility [LINK]
• 05/20/2015: Borealis / Agrifos joint press release: Borealis and Agrifos announce major milestone in the development of ammonia production project in US [LINK]
• 11/21/2012: Fertecon: Ammonia Company News (8 November) [LINK]
• 11/02/2012: Rentech press release: Rentech Nitrogen Partners, L.P. Completes Acquisition of Fertilizer Producer Agrifos LLC; Closes $300 Million Amended Senior Secured Credit Facilities [LINK]