The EPC firm working on OCI's world-scale nitrogen complex in Iowa was supposed to hand over the keys to the plant two years ago. While IFCo is now operating and managing the site, the EPC firm is still there, finishing up, and the formal hand-over ("project acceptance") hasn't happened ... despite the fact that OCI held a ribbon-cutting ceremony back in April.
Blame the opossum, who knocked out the power for a while.
In August 2017, Cronus Chemicals announced that its proposed greenfield in Tuscola, IL, is still moving forward, with a shiny new agreement with an EPC firm, as well as a revised project scope (more ammonia, less urea), and a more realistic schedule.
Unfortunately, while this was widely reported as being a major step forward, there's a world of difference between an agreement with an EPC firm and an actual EPC agreement.
It must have been a long summer for Midwest Fertilizer Company, which has been attempting to wrangle ThyssenKrupp into a new EPC contract while mounting a challenge to the IRS. Both efforts are essential if the project is to have any chance of moving forward. Nonetheless, Midwest recently announced a revised budget along with its new groundbreaking and start-up schedule.
Construction is almost complete on Fortigen's new ammonia plant in Nebraska, and "the pre-commissioning stage is now underway,” according to local press. Unfortunately, there was a significant setback on the site at the end of May, when the ammonia storage tank was damaged, which will probably delay full operations by at least a month.
LSB Industries announced last night that it has decided to "terminate the formal sale process portion of its strategic review," which it launched in November 2016. This means it is no longer seeking a buyer for the company itself, although its assets could still be available.
Yara released its earnings report for the second quarter yesterday, featuring a long tale of woe for nitrogen margins based around the argument that nitrogen commodity prices are depressed due to oversupply.
Still, this won't stop Yara from opening its new world-scale ammonia plant later this year, which remains on schedule at Freeport in Texas.
In May 2016, Phibro announced that it was going to invest $450 million to open a half million ton per year ammonia plant in Indiana. There's been precious little news about the project since then, but a lack of news doesn't mean that nothing is happening.
In 2012, when US Nitrogen broke ground on its new plant in Tennessee, the resurgence of the North American nitrogen industry was just beginning. Ammonia sold at high prices but, thanks to the shale gas revolution, the natural gas feedstock was cheap. As a result, profit margins were high and forecasts were rosy.
Now, it's different. Ammonia and its derivatives don't command high prices, which makes it a poor time to begin operating an expensive new plant - but those same low prices might make this a good time to begin construction.
Recent news regarding both completed and future projects illustrate the sometimes painful relationship between product pricing in a cyclical industry and the timing of investment decisions.
The simple economic argument for investing in a new ammonia plant in the US today is that ammonia prices, being cyclical, will recover from their present short-term low, but that natural gas prices, being fundamentally altered by the shale gas revolution, will stay low in the long-term.
"IFC was ready to make it official. The company was at 100 percent operation. It was time for the ribbon cutting."
Well, yes and no.
Yes, Iowa Fertilizer Company held a ribbon-cutting ceremony to celebrate its greenfield at Wever. No, Wever is hardly 100% complete: the ammonia plant is operational, but the downstream plants may be months away.
Agrium announced yesterday that it has "successfully commissioned" its new urea plant at Borger, TX, "with its first run of urea production." The plant had been mechanically complete at the end of 2016.
The Lithuanian investors behind a proposed ammonia plant in Louisiana have put the project "on hold indefinitely," according to local economic development officials quoted in the local press this week.
Dyno Nobel's new plant at Waggaman, LA, is producing ammonia above its daily rated capacity. Conversely, total production in 2017 is expected to be closer to 80% of annual capacity, because it is likely to be taken offstream regularly this year while it ramps up.
This article discusses the early performance of the Waggaman ammonia plant, and the cost overruns it saw during construction.
EuroChem's CEO confirmed in the Russian press yesterday that the company still intends to build its massive greenfield nitrogen plant in Louisiana. This article introduces some of the changing market conditions that will impact, for better or for worse, EuroChem's final investment decision.
2016 was a transformative year for the North American ammonia industry but, in 2017, the bigger impact will be on the urea industry.
Here's an update on four urea expansions expected on-stream this year and next, which will add almost two million tons of new urea capacity. In the process, they'll reduce the amount of ammonia that's available for sale by more than one million tons.
And, as a bonus, I have news on an embattled "clean coal" project that, in what might be a last gasp attempt at a viable business model, could potentially add another 1.5 million tons of urea in Texas.
I've published recent updates on four greenfield nitrogen plants that hope to break ground in 2017, potentially adding 1.8 million tons of ammonia capacity in the US.
The project pipeline is long, however, and others are making progress too. This article provides updates on another four projects that, together, could add more than 4 million tons to North American ammonia capacity through 2022.
Midwest Fertilizer Company continues to juggle progress and setbacks on its $3 billion greenfield nitrogen plant in Indiana, following the December 2016 termination of its EPC contract with ThyssenKrupp. In the last few weeks, we've seen updates on the EPC contract, air permits, debt financing in Pakistan, and the $1.259 billion tax-exempt bond issue in the US.
Five years after breaking ground, and almost three years behind schedule, US Nitrogen's ammonium nitrate plant in Tennessee has finally reached "full production capacity."
This project has been so fraught with problems - permitting, compliance, engineering design, construction, community acceptance, health and safety - that it wasn't always obvious whether the plant would ever be fully operational. Even now, a raft of legal challenges remain unresolved.
Grannus awarded two contracts for design and technology licensing in November, and it has started December with a third announcement, naming its new EPC partner.
Yesterday's announcement, which sees the previous engineering partner entirely replaced, focuses on the company's business model, which is not to be an ammonia producer, but to be a global licensor of regional-scale ammonia plant technology.