UPDATED: 02/06/2018 — see Change Log

OWNER: Nutrien, formerly Agrium
PROJECT: Ammonia-Urea Plant, expansion & urea brownfield[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): 72 permanent — see Job Openings [LINK]
START-UP DATE (reported): 1968

UREA BROWNFIELD:
COST (reported): $720 million
JOB CREATION (reported): [none given] — see Job Openings [LINK]
START-UP DATE (reported): 2017

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia	490,000 mtpy	451,438 mtpy	[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] Nutrien Fact Book 2018. Sources linked below. [3] [Membership required]. Sources: linked below. [4] [Membership required]. See Methodology.

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SUMMARY STATUS: Ammonia expansion Cancelled, Urea brownfield Operational
In April 2017, Agrium “successfully commissioned” its brownfield urea plant at Borger, which had been under construction since March 2014, more than a year behind schedule and 10% over budget. An expected debottleneck of the ammonia line was cancelled in 2015. In January 2018, Nutrien was formed through a “merger of equals” between Agrium and PotashCorp that was originally announced in September 2016.

EXISTING PLANT:
COST: [none given]
JOB CREATION: 72 permanent — see Job Openings [LINK]
START-UP DATE: 1968

EXPANSION:
COST: $720 million
JOB CREATION: [none given] — see Job Openings [LINK]
START-UP DATE: 2015 ammonia, 2017 urea
LIKELIHOOD: Dead ammonia, Done urea — see Methodology

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia	490,000 mtpy	451,438 mtpy GROSS 104,000 mtpy NET		451,438 mtpy GROSS 104,000 mtpy NET
Urea		610,000 mtpy	796,415 stpy GROSS 730,000 stpy granulated	610,000 mtpy GROSS
DEF		100,000 mtpy new		107,353 mtpy new
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 presentations / Nutrien Fact Book 2018. Sources linked below. [3] Texas Commission for Environmental Quality (TCEQ) air quality permit. Sources: linked below. [4] Adjusted Capacity is in metric tons per year; based on Nutrien’s data. See Methodology.

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

RESEARCH NOTES:
In January 2018, Nutrien was formed through a “merger of equals” between Agrium and PotashCorp that was originally announced in September 2016.

In April 2017, Agrium announced that it had “successfully commissioned” its new urea plant, with a capacity of 610,000 tons per year. “We continue to ramp up production and expect to reach full operational capacity by the end of the second quarter of 2017.”

In January 2017, Agrium had announced that it had “completed construction” of the plant, “within the previously disclosed revised time line and cost parameters.” At that time, commissioning was “underway and production is expected to commence in the first quarter of 2017.”

This “revised” schedule and budget represent a year’s delay and a 10% cost overrun relative to Agrium’s initial plans. These changes were adopted in 2015, when the budget rose from $650 million to $720 million, and delays were build into the schedule to “help us contain the costs.”

In February 2017, Agrium provided further detail on the commissioning process in its Q4 2016 earnings call:

Borger is making fantastic progress. It’s been done safely. It’s on the revised budget and it’s on time, which is wonderful. So the plant was completed at the end of last year and we’re going through commissioning at the moment. I can tell you commissioning is going really, really well …

We expect that we’ll get the first meaningful products out of the plants by the end of the quarter, and we expect it to ramp up pretty quickly in the second quarter to close to fill rates.
Henry Deans, SVP-Wholesale, Agrium Q4 2016 earnings call transcript, 02/10/2017

In February 2014, the Agrium board approved the “Lone Star Project,” an expansion project at its Borger plant, which originally included both debottlenecking the ammonia plant and building a new urea plant.

Construction began in March 2014, and 145,000 metric tons of new ammonia capacity was expected to come online during the “60 day ammonia turnaround 2H 2015.” This part of the project was cancelled, however, according to Agrium’s 2Q 2015 earnings announcement, in order to “to minimize project risk.”

In Agrium’s Q2 2015 earnings call, in early August 2015, CEO Chuck Magro described canceling the debottleneck as follows:

When we simply looked at the smaller part of the project, which was the expansion of the ammonia plant, when you look at that, it’s a 40-year-old plant. By the time we finished the detailed engineering and then the outage planning, it became really evident that the capital costs and the downtime to get that 145,000 tonnes while sort of doing open-heart surgery on a 40-year old ammonia plant, the risk profile and the return profile didn’t make sense.
Chuck Magro, CEO, Agrium Q2 2015 earnings call transcript, 08/06/2015

The 610,000 mtpy brownfield urea plant was supposed to start up in early 2016 but, in August 2015, this was pushed back “by several quarters [to] help us contain the costs,” and “we anticipate … to have the urea plant mechanically complete by the end of 2016.”

In November 2015, during the Q3 2015 earnings call, Agrium reported that construction was “actually progressing very well, and we’re most impressed with how things have gone since we focused on just the urea plant expansion.”

In May 2015, Agrium’s Investor Presentation had stated that the project would cost $720 million, with an IRR of “+12%” (in November 2013, these numbers had been $650 million, with IRR “>12%”). In August 2015, when the ammonia expansion was cancelled, “the project CapEx remains within 5% of the original $720 million estimate.”

In March 2014, KBR announced that it won the EPC contract. The revised air permit was approved in October 2014.

Including plans for the debottleneck, net ammonia output would have decreased “by approximately 160,000 tonne/yr, to approximately 270,000 tonnes/yr of net ammonia assuming urea runs at full capacity,” because more ammonia will be upgraded in the new urea plant. Without the debottleneck, net ammonia will be closer to 125,000 mtpy.

Before the new urea plant started up in 2017, an old 99,000 mtpy urea plant was operating on the site. According to the Nutrien Fact Book 2018, which disclosed a total site urea capacity of just 610,000 mtpy, this old urea plant has been decommissioned.

The Borger plant has CCS technology in place. Fertilizer is shipped out by truck and rail, and ammonia via pipeline.

The original ammonia plant at Borger was built by M. W. Kellogg in 1967. It started up in October 1968 with a capacity of 1,000 stpd. The site operated as a 50-50 joint venture between Hill Chemicals Inc and Cominco American Incorporated (the US subsidiary of Canadian firm Cominco Fertilizers Ltd) until, in 1971, Cominco bought out its partner’s share to become sole owner.

In 1973, the site’s operating name was changed to Camex Inc. In 1980, the first urea plant was added, with a 250 stpd capacity. In 1993, Cominco changed its name to Agrium Inc. Agrium idled the plant from 2006 to 2009 because of the high price of natural gas feedstock.[/memberful]

View larger map with all ammonia plants.

ADDRESS: 9021 Farm Road 1551, Borger, TX 79007, United States

WEBSITE: https://www.nutrien.com

REGULATORY SOURCES:

• USGS: Minerals Yearbook, Nitrogen [RECENT / ARCHIVE]
• EPA Emissions data: Greenhouse Gas Emissions from Large Facilities: Agrium Borger [LINK]
• Risk Management Plan: Right to Know Network: Agrium US Inc, Borger Nitrogen Operations [LINK]
• Permit Documents: TCEQ Document Search (search for Agrium Borger) [LINK] / Operating Permit, revised 10/2014 [PDF]
• US Securities and Exchange Commission regulatory filings: EDGAR Search Results, AGRIUM INC CIK#: 0000943003 [LINK]

NEWS SOURCES:

• 01/02/2018: Nutrien press release: Agrium and PotashCorp Merger Completed Forming Nutrien, a Leader in Global Agriculture [LINK]
• 01/2018: Nutrien Fact Book 2018 [PDF]
• 04/18/2017: Agrium press release: Agrium Successfully Completes Commissioning of New Urea Facility [LINK]
• 02/10/2017: Seeking Alpha earnings call transcript: Agrium Q4 2016 [LINK]
• 01/10/2017: Agrium press release: Agrium Successfully Completes Construction of Borger Expansion [LINK]
• 09/12/2016: Agrium / PotashCorp merger presentation: Creation of a World-Class Integrated Global Supplier of Crop Inputs [PDF]
• 09/12/2016: Agrium press release: Agrium and PotashCorp to Combine in Merger of Equals to Create a World-Class Integrated Global Supplier of Crop Inputs [LINK]
• 08/04/2016: Seeking Alpha earnings call transcript: Agrium Q2 2016 [LINK]
• 08/06/2015: Seeking Alpha earnings call transcript: Agrium Q2 2015 [LINK]
• 08/05/2015: Agrium press release: Agrium Reports Strong Results Despite Challenging Market Conditions [LINK]
• June 2015: Agrium Brochure: Borger [PDF]
• 05/21/2015: Agrium Investor Presentation, May Roadshow Presentation [PDF]
• 05/06/2015: Seeking Alpha earnings call transcript: Agrium Q1 2015 [LINK]
• UNDATED: KBR project profile: Agrium’s Lone Star Project [PDF]
• 04/04/2014: Borger News Herald, local news article: Borger to receive temporary water safety net from Amarillo [LINK]
• 03/12/2014: KBR press release: KBR Awarded Two Engineering, Procurement, and Construction Contracts for Agrium’s Nitrogen Operations Facility [LINK]
• 02/25/2014: Agrium press release: Agrium’s Board Approves Nitrogen Debottleneck Expansion [LINK]
• 01/22/2014: Seeking Alpha transcript: Agrium’s CEO Presents at CIBC’s 17th Annual Whistler Institutional Investor Conference [LINK]
• Nov 2013: Agrium: Investor Presentation, November 2013 [PDF]
• 06/03/2013: Agrium press release: Agrium Continues Assessment of Nitrogen Expansions [deleted from Agrium’s press release archive], online at AgProfessional.com [LINK]
• 01/10/2013: Borger News Herald article: BEDC plans to invest in potential Agrium project [LINK]
• UNDATED: Cominco American Incoporated, Camex Operations: A History [LINK]