This will be a transformative year for the ammonia industry. Four world-scale ammonia plants are scheduled to begin production, as well as three smaller plants, a couple of expansions, and a “clean coal” behemoth.
If all these projects start up successfully this year, they will add more than five million tons of ammonia capacity.
The new projects scheduled for 2016 will increase North American capacity by more than a quarter – and, because only one of these projects is in Canada, will increase US capacity by more than a third.
In total, we’re looking at 5,094,195 metric tons of new capacity coming online in one year, on top of a current capacity of 19,203,632 metric tons in North America (a 26.5% expansion) or 13,598,904 metric tons in the US alone (a 37% expansion).
There’s little doubt that most of this capacity will come on-stream this year, though some projects may be pushed into 2017 (and one small one has yet to start construction, so … we’ll see about that). Much of the timing, I suspect, will depend on the weather.
|NEW AMMONIA CAPACITY||DELAYED FROM 2015||SCHEDULED FOR 2016||TIMING|
|DONALDSONVILLE, LA||1,324,490 mtpy||Q1|
|GREENEVILLE, TN||66,224 mtpy||Q1 or Q2|
|BRANDON, MB||90,000 mtpy||Spring|
|BEATRICE, NE||52,980 mtpy||April|
|WEVER, IA||876,000 mtpy||Q2|
|EL DORADO, AR||513,240 mtpy||Q2|
|KEMPER COUNTY, MS||19,958 mtpy||June|
|PORT NEAL, IA||883,104 mtpy||Q3|
|WAGGAMAN, LA||920,520 mtpy||Q3|
|PASADENA, TX||215,230 mtpy||Q3|
|ENID, OK||132,449 mtpy||Q4|
|TOTAL = 5,094,195 mtpy||1,105,162 mtpy||3,989,033 mtpy|
|Adjusted Capacity data in metric tons per year; assumes operations for 365 days per year. Note that there may be discrepancies between the Adjusted Capacity presented here and numbers announced by the companies; see individual project pages for exact data sources (eg, air permits). See Methodology.
Data source: https://ammoniaindustry.com, as of 01/12/2016
It’s going to be a big year for CF Industries, with new world-scale plants starting up at Donaldsonville, LA, Port Neal, IA, and – assuming the OCI merger goes through – Wever, IA. According to CF’s recent investor presentations, delays at the Wever plant mean that it won’t be the first new ammonia plant since anything – because the Donaldsonville plant will begin operations first. Wever was supposed to start up in 2015, but is now scheduled for Q2 2016. At the moment, it seems that CF will be commissioning a new world-scale ammonia plant in each of the first three quarters of 2016.
It’s also a big year for Dyno Nobel, and parent Incitec Pivot, whose Waggaman, LA, plant should begin operations in the second half of the year. This will make Dyno Nobel self-sufficient in ammonia, supplying all its upgrade plants around the US.
Another explosives maker, Austin Powder, will be relieved when their small US Nitrogen plant at Greeneville, TN, finally starts up. This was supposed to begin in 2015 (well, 2014 actually), but has been so beset by problems it’s been hard to follow too closely. I’ll be interested to see if operations run more smoothly than planning and construction did.
Another company that will be heaving a corporate sigh of relief upon start-up will be Southern Company, whose Mississippi Power “clean coal” power plant in Kemper County, MS, is years behind schedule and billions over budget. And, while this project won’t produce much ammonia, it may finally pay dividends to technology licensor KBR, should the technology be picked up in other nations.
Other ammonia projects delayed from 2015 include two expansions for Koch Industries, at Brandon, MB, and Beatrice, NE. Koch may also complete its ammonia expansion at Enid, OK, which is due by the end of the year, though this may be delayed into 2017.
LSB Industries is another company that will be deeply relieved when its new (used) plant starts up at El Dorado, AR. 2015 was not a good year for LSB: capex doubled during construction, share price fell more than 80%, executives were replaced. Shareholders must be hoping that this new plant will perform better than LSB’s other plants, which have been going in and out of service with too much regularity – but, given its age (it was built in 1969), only time will tell.
The least certain project in the 2016 schedule is Pallas Nitrogen, which proposes to reconstruct an old ammonia loop in Pasadena, TX. It’s not yet clear to what extent this project is moving forward – there’s no website, let alone construction activity – and, in any case, I suspect the construction schedule is overly optimistic (just ask LSB how hard it is to rebuild an old plant). I see this one being pushed back – if it gets off the ground at all.