AM Agrigen: new strategy for Louisiana ammonia plant


AM Agrigen has had its air permit extended for another year (unlike one other proposed greenfield) but, in its application, disclosed a completely different plan for the project.

For over a year, I’ve been commenting on the creativity that ammonia project developers have been forced to display, in order to demonstrate a viable business model.

The remaining pipeline of potential new ammonia plants has shifted away from brand-new, multi-billion dollar, world-scale plants producing multiple end products; these demonstrated good efficiencies of scale but became – evidently – almost unfundable.

Now the focus is on developing smaller ammonia plants, using diverse feedstocks, and avoiding as much new machinery as possible.

AM Agrigen’s proposed ammonia-urea greenfield in Killona, LA, has joined this trend by repositioning itself as a restart instead of a new build.

According to documents at LDEQ:

AM Agrigen Industries is currently engaged in negotiations involving bringing an existing ammonia plant located in Sharjah, United Arab Emirates, to the site. The intention is to disassemble, transport the plant to the site, and reconstruct and upgrade the relocated plant.

The existing plant is currently undergoing evaluation, which will be followed by the full development of an Engineering, Procurement and Construction (EPC) agreement for its transportation, upgrade, and reconstruction. The EPC development contract has already been negotiated and is expected to start in early October 2016. We anticipate starting site preparation work in 12-14 months (ie, 3rd Quarter 2017).
AM Agrigen, LDEQ application to extend Permit to Construct, 09/10/2016

Louisiana DEQ approved this permit extension, giving AM Agrigen until October 2017 to begin construction work. I don’t know whether anyone signed an EPC agreement, yet.

I haven’t been able to get confirmation of the size and identity of this to-be-relocated ammonia plant, but I only know of one sitting idle in Sharjah: the Green Dome Petrochemicals unit, which was shipped there in 2006 from Lawrence, KS, where it had been bought at auction following the bankruptcy of Farmland Industries.

Lawrence Journal-World, 04/24/2004
If the new AM Agrigen ammonia plant at Killona will, in fact, be the old Farmland plant from Lawrence, we already know a bit about it.

The plant was built using Kellogg technology in 1971, when it replaced an older ammonia plant that had started-up in 1954. When it was idled in 2001, the ammonia plant’s capacity was 1,180 mtpd, or slightly over 400,000 mtpy.

This would be less than half the size of the plant that AM Agrigen originally proposed – which could be convenient for permitting purposes because emissions for this new project would, presumably, be less than the already-approved emissions for the larger design.

You might think the industry would have learned a thing or two about relocating old units, by now. It might look like a good strategy on paper, but it demonstrably hasn’t worked as planned for either LSB Industries at El Dorado, AK, or US Nitrogen at Greeneville, TN. Both those plants had massive problems in construction and went severely over-budget – the Greeneville plant, which was supposed to be operational in 2014, is still not up and running.

And, although presumably AM Agrigen would do a thorough refurbishment job on the old unit, we might also question the quality of plant.

First, I can’t find any record of the plant ever successfully producing ammonia in Sharjah (part of the United Arab Emirates). I can find evidence that it was reconstructed over there, but I wonder if it ever worked properly? (Comments below, please, if you know.) If not, that would raise some questions.

Second, I’m not convinced that it’s a particularly good plant to start out with. According to the local press in 2004, the year the ammonia plant was auctioned (note that this quote refers to the whole plant, not just the ammonia unit):

The plant has been closed since May 2001, a year before Farmland filed for Chapter 11 bankruptcy protection and began work to liquidate its assets. The cooperative eventually would sell its other, more modern fertilizer plants.

But the Lawrence complex, opened in 1954, remained an albatross. The plant was the cooperative’s most costly and least efficient, and had been shut down intermittently in the months leading up to the permanent closure because of maintenance problems, explosions and market pressures.
Lawrence Journal-World, 04/24/2004

Everything I know about AM Agrigen’s project is in my Research Note for Killona, LA.

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