In August 2018, Reuters reported that cheap natural gas was driving industry expansions across Alberta, and disclosed that CF Industries was undertaking a 150,000 stpy expansion of the ammonia line at its Medicine Hat plant, as part of the scheduled turnaround.
CF Industries Holdings Inc is boosting ammonia fertilizer production by 150,000 short tons annually at its Medicine Hat, Alberta, plant starting later this year. The lower cost allows it to ship farther than usual, to farmers in the corn-growing U.S. state of Iowa.
“At times it’s free,” said Bert Frost, CF’s senior vice-president of sales, of Alberta’s gas. “We have the lowest-cost gas in the world today.”
Reuters, Canada’s ultra-cheap natural gas drives hopes of petrochemical boom, 08/22/2018
Following a slightly mistaken report in the local newspaper, CF reps clarified details of the company’s plans in the Medicine Hat News, emphasizing that the “plan to increase production … doesn’t require capital investment or improvements at the facility.”
CF industries is scheduled to maximize existing production capacity and use that to boost export volumes through the fall after current general maintenance at the plant is completed.
That will be accomplished by running the existing plant at a higher rate, officials clarified …
The Illinois-based company is planning minor improvements to its logistics and storage network across North America to handle the added volume.
Medicine Hat News, CF Industries says production increase won’t require upgrades, 08/28/2018
The earlier Medicine Hat News article, of August 25, 2018, reported that turnaround work had already begun, with “the massive crane and ongoing work at the site.”
CF Industries did not clarify the cost or schedule of the work for local reporters. However, in its Q2 2018 Earnings Call, on August 2, its CFO, Dennis Kelleher, provided this overview of the whole company’s maintenance capex costs, across all its sites.
Looking ahead to the end of [2018], we continue to expect our capital expenditures to be approximately $400 million to $450 million for new activities. Capital expenditures through the second quarter of 2018 were $145 million. As we have said previously, we have a higher number of planned turnarounds in 2018 compared to 2017. The majority of our turnaround activity will take place in the third and fourth quarters.
Dennis Kelleher, CFO, CF Industries, SeekingAlpha Q2 2018 Earnings Call transcript, 08/02/2018
For more information, see my Research Note for Medicine Hat, AB.