UPDATED: 04/17/2016 — see Change Log

OWNER: CF Industries Nitrogen LLC (CF Industries Holdings Inc)
PROJECT: Nitrogen fertilizer complex, brownfield ammonia-urea 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): None given
JOB CREATION (reported): 191 permanent — see Job Openings [LINK]
START-UP DATE (reported): 1967

BROWNFIELD:
COST (reported): $2+ billion
JOB CREATION (reported): 125 permanent, 5,300 peak construction — see Job Openings [LINK]
START-UP DATE (reported): 2016

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia	345,000 mtpy	EXISTING: 380,000 stpy BROWNFIELD: 850,000 stpy	[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] CF Industries 2016 10-K. Sources: linked below. [3] [Membership required]. Sources: linked below. [4] [Membership required]. See Methodology.

[/memberful]

[memberful does_not_have_subscription=”1314-ammonia-industry-annual-subscription,1311-ammonia-industry-monthly-subscription,3338-ammonia-industry-30-day-subscription”]

[/memberful]

[memberful has_subscription=”1314-ammonia-industry-annual-subscription,1311-ammonia-industry-monthly-subscription,3338-ammonia-industry-30-day-subscription”]

SUMMARY STATUS: Operational
Port Neal’s new ammonia-urea plant started up in December 2016. CF Industries announced the project in late 2012 and began construction in 2013; project costs increased considerably during construction, and start-up was about six-months behind schedule. The new plants are now running at or above capacity.

EXISTING PLANT:
COST: $27 million in 1967
JOB CREATION: 191 — see Job Openings [LINK]
START-UP DATE: 1967

BROWNFIELD:
COST: $2.8 billion estimate, originally $1.7 billion
JOB CREATION: 125 permanent, 5,300 peak construction — see Job Openings [LINK]
START-UP DATE: December 2016, originally mid-2016
LIKELIHOOD: Done — see Methodology

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia	345,000 mtpy	EXISTING: 380,000 stpy GROSS 30,000 stpy NET BROWNFIELD: 2,425 stpd 850,000 stpy GROSS 80,000 stpy NET TOTAL: 1,230,000 stpy GROSS 110,000 stpy NET	EXISTING: 1,300 stpd BROWNFIELD: 2,667 stpd	EXISTING: 430,459 mtpy GROSS 28,382 mtpy NET BROWNFIELD: 883,104 mtpy GROSS 75,685 mtpy NET TOTAL: 1,313,563 mtpy GROSS 104,067 mtpy NET
Urea		EXISTING: 50,000 stpy NET BROWNFIELD: 3,850 stpd 1,350,000 stpy TOTAL: 1,400,000 stpy NET	EXISTING: 1,075 stpd BROWNFIELD: 4,235 stpd	EXISTING: 355,957 mtpy GROSS 47,303 mtpy NET BROWNFIELD: 1,402,304 mtpy TOTAL: 1,758,260 mtpy GROSS 1,449,620 mtpy NET
Urea (liquor)			160 stpd	52,980 mtpy
Nitric Acid			1,000 stpd	331,122 mtpy GROSS
Ammonium Nitrate			1,400 stpd	463,571 mtpy GROSS
UAN		800,000 stpy	2,400 stpd	794,694 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] CF Industries 2016 10-K, assumes average operation for 350 days per year. Sources: linked below. [3] Iowa DNR, 2010 Title V permit, 2015 Title V permit application, and various Permits to Construct, some data converted from short tons per hour (x24). Sources: linked below. [4] Adjusted Capacity is in metric tons per year assuming operations for 365 days per year; gross capacity based on permitted capacity, net capacity based on company reports. See Methodology.

FEEDSTOCK: Natural gas
END PRODUCTS: Ammonia, Urea, DEF, UAN

RESEARCH NOTES:
CF Industries announced its $3.8 billion expansion plans in November 2012, including a $1.7 billion ammonia-urea plant at Port Neal and a $2.1 billion ammonia-urea-UAN plant at Donaldsonville, LA. The new plants began operation at Port Neal in December 2016, and are running at or above nameplate capacity.

Now that the brownfield plants have been built, local news reports that CF is planning its next project, which may result in a minor increase in ammonia capacity at the original plant:

CF plans to upgrade the ammonia converter system at its original nitrogen production plant over the next couple of years.

This project will cost about $25 million and require about 500 contractors to complete. Additionally, components of the upgrade are being shipped from Italy and will be barged to the site via the Missouri River this spring.
Sioux City Journal, CF Industries officials glad to be done with major expansion, 04/16/2017

The new plants at Port Neal were mechanically complete in August 2016, and started up in December 2016 – about 6 months behind schedule, and probably more than a billion dollars over budget. Nonetheless, the new ammonia and urea units are both running at or above nameplate capacity.

In October 2016, CF had begun the commissioning process, putting the flare stack into service.

In September, we tested the granulation part of the urea plant. We have been stockpiling ammonia into the tanks and anyone who is in the Port Neal area has seen the flare stack lit up, so we’ve got gas and steam going into the reformer front-end.

As we work kind of from the reformer through the CO2 removal system, we’re going to start sending CO2 over to the urea plant and then be able to pull ammonia out of the tanks. And so, that’s what we’re planning in terms of the parallel commissioning. So, it’s very likely that urea will actually be online before the ammonia plant is fully up. It’s a simpler plant to commission and granulation is already operational.

But our expectation is it’s a matter of a couple of weeks, maybe three weeks or four weeks, depends upon the number of little issues that you find as go through it.
Seeking Alpha: CF Industries Q3 2016 Earnings Call transcript, 11/03/2016

In the last week of December, CF announced that both the ammonia and urea plants had been commissioned. At the time of this announcement, however, both plants were actually down for repairs, which implies to me that CF was under pressure to get this announcement out in 2016, even if it was too soon to really claim the plants were fully operational – possibly to keep its shareholders happy.

The ammonia plant, which began production in late November, has operated at approximately its nameplate capacity of 2,425 tons per day. The back end of the plant (ammonia synthesis) was recently taken offline to replace a gasket and is expected to resume production shortly … The urea plant, which was commissioned earlier this month, has produced on specification granular urea. The urea plant was also recently taken offline to replace a relief valve and is expected to resume production shortly as well.

“CF’s capacity expansion projects are complete,” said Tony Will, president and chief executive officer, CF Industries Holdings, Inc.
CF Industries press release, 12/28/2016

But by February 2017, when CF Industries reported its Q4 2016 earnings, Port Neal’s ammonia and urea plants were operating at or above nameplate capacity:

The ammonia plant at Port Neal is running at a 110%-ish of nameplate right now. So, I would say we’re well past full capacity at the moment. The urea plant has run about at – is running about at nameplate and it’s a little bit like happened at Donaldsonville because it’s a sister plant to the D’ville plant which is we brought it up to nameplate and then continued to step it up over the next couple of months and ultimately where the D’ville plant is currently operating is between about 10% and 15% above the nameplate. And so, we expect to get the same kind of performance out of the Port Neal urea plant here as we go through kind of the balance of the first quarter into the early second quarter. But that plant is fully operational and – at or above nameplate.
Anthony Will, CEO, CF Industries Q4 earnings call transcript, 02/16/2017

The Port Neal expansion saw significant cost increases during construction. In March 2015, CF Industries announced that combined costs for this and the Donaldsonville project had increased by “just under 10 percent” to $4.2 billion. Most of this increase was for Port Neal, bringing expected costs here to ~$2 billion. In November 2015, CF announced that these combined costs had risen again by “approximately 10 percent,” with Port Neal again contributing most of the increase.

In the Q3 2015 earnings call in early November 2015, CF’s CEO said that “if you look at the effective impact on the margin that we’re realizing … there has been a little bit of deterioration particularly in Port Neal, because that’s where the brunt of the cost increases have occurred.”

According to CF’s Q3 2016 earnings report, the total cost of the two expansion projects had risen again – by roughly another 10% – to a new total of $5.2 billion. Although CF did not provide a breakdown between the two sites, I estimate current capex for Port Neal at ~$2.8 billion (and Donaldsonville at $2.4 billion).

The new ammonia plant will use technology from Thyssenkrupp Uhde; the urea plant is from Stamicarbon. Uhde Corporation is providing engineering and procurement services.

As part of CHS‘s 2015 “strategic partnership” investment in CF Industries, CHS will have the right to buy up to 1,095,000 (short) tons of urea and 580,000 tons of UAN every year. According to a corporate presentation from November 2015, Port Neal will provide 505,000 tons of urea and 100,000 tons of UAN toward this commitment.

Product is distributed from the Port Neal complex by truck and rail, as well through the Magellan ammonia pipeline.

The Port Neal nitrogen plant was built by Terra Chemicals International Inc and began operations in 1967. Terra expanded the ammonia line in 1992, and the UAN plant in 1995. CF Industries acquired Terra in 2010, in a deal that created the second largest nitrogen company in the world.

Port Neal is noteworthy as the site of a massive fatal accident in 1994, when the ammonium nitrate plant exploded. The entire site was damaged in the blast; 25,000 gallons of nitric acid were spilled, and over 5,000 tons of ammonia were released during the six days it took to get the situation under control. It is worth reiterating the causes of this blast, so that we can avoid repeating it. The following is from the EPA’s extremely interesting Chemical Accident Investigation Report (the emphasis is mine).

The investigation team concluded that the explosion resulted from a lack of written, safe operation procedures at the Terra Port Neal ammonium nitrate plant. The lack of safe operating procedures resulted in conditions in the plant that were necessary for the explosion to occur.

The significant conditions that caused the explosion were:

1. Strongly acidic conditions in the neutralizer and rundown tank;
2. Prolonged application of 200 psig steam to the neutralizer nitric acid spargers;
3. The creation of bubbles and low density zones in the neutralizer;
4. Lack of flow in the neutralizer and rundown tank;
5. The presence of chlorides in the neutralizer and rundown tank; and
6. Lack of monitoring of the ammonium nitrate plant after the plant was shut down with the process vessels charged.

No process hazards analysis had been completed on the ammonium nitrate plant, and interviews with Terra personnel indicated that they were not aware of many of the hazards of ammonium nitrate.

Please respect these chemicals. [/memberful]

View larger map with all ammonia plants.

ADDRESS: 1182 260th Street, Sgt. Bluff, IA 51054, United States

WEBSITE: https://www.cfindustries.com/who-we-are/locations/port-neal-nitrogen-facility

REGULATORY SOURCES:

• USGS: Minerals Yearbook, Nitrogen [RECENT / ARCHIVE]
• EPA Emissions data: Greenhouse Gas Emissions from Large Facilities: CF Industries Nitrogen, LLC-Port Neal Nitrogen Complex [LINK]
• Risk Management Plan: Right to Know Network: CF Industries Nitrogen, LLC – Port Neal Complex [LINK]
• Operating Permit (Title V): Iowa DNR Draft & Final Title V Permits [LINK / 2010 permit PDF]
• Construction Permitting: Iowa DNR Construction Permit Search [LINK]
• US Securities and Exchange Commission filings: EDGAR Search Results, CF Industries Holdings, Inc. CIK#: 0001324404 [LINK]

NEWS SOURCES:

• 04/16/2017: Sioux City Journal: CF Industries officials glad to be done with major expansion [LINK]
• 02/16/2017: Seeking Alpha earnings call transcript: CF Industries Q4 2016 [LINK]
• 12/28/2016: CF Industries press release: CF Industries Announces Completion of Port Neal, Iowa, Capacity Expansion Project [LINK]
• 12/27/2016: Sioux City Journal: CF Industries completes $2 billion expansion [LINK]
• 11/03/2016: Sioux City Journal: CF: Port Neal plant in process of starting up [LINK]
• 11/02/2016: CF Industries press release: CF Industries Holdings, Inc. Reports Third Quarter Net Earnings [LINK]
• 10/14/2016: Sioux City Journal: 320-foot-tall stack at CF starts producing flames up to 200 feet [LINK]
• 08/31/2016: Sioux City Journal: CF’s Port Neal plant mechanically complete [LINK]
• 08/03/2016: CF Industries press release: CF Industries Holdings, Inc. Reports Second Quarter Net Earnings [LINK]
• 03/17/2016: Sioux City Journal: 1 dead, 1 injured at CF Industries site [LINK]
• 03/17/2016: Sioux City Journal: CF nears completion of $2B expansion at Port Neal [LINK]
• 02/17/2016: CF Industries press release: CF Industries Holdings, Inc. Reports Fourth Quarter Net Earnings [LINK]
• 11/04/2015: CF Industries press release: CF Industries Holdings, Inc. Reports Third Quarter Net Earnings [LINK]
• 09/28/2015: Sioux City Journal: CF construction employment to exceed 4,000 [LINK]
• 03/29/2015: Sioux City Journal: Massive structures emerge as CF construction progresses [LINK]
• 03/04/2015: Sioux City Journal: CF Industries expansion costs grow by $400M [LINK]
• 02/17/2015: CF Industries press release: CF Industries Holdings, Inc. Reports Fourth Quarter Net Earnings [LINK]
• 06/02/2014: Des Moines Register: Development Spotlight: CF Industries fertilizer plant [LINK]
• 07/16/2013: CF Industries press release: CF Industries Receives Louisiana and Iowa Air Permits [PDF]
• 03/31/2013: Sioux City Journal: CF starts hiring for record Port Neal expansion [LINK]
• 11/09/2012: Stamicarbon press release: Stamicarbon has been Awarded Licensing Contracts for Two New Urea Plants for CFI, USA [LINK]
• 11/05/2012: ThyssenKrupp Uhde press release: ThyssenKrupp Uhde Wins Mega Contract for Fertiliser Plants in USA [LINK]
• 11/01/2012: CF Industries press release: CF Industries Announces Capacity Expansions [PDF]
• 03/10/2010: CF Industries press release: CF Industries and Terra Industries Agree to Combine, Creating a Global Industry Leader [PDF]