UPDATED: 03/19/2018 — see Change Log

OWNER: Nutrien, formerly PotashCorp
PROJECT: Nitrogen plant, restart, expansion and urea brownfield[memberful does_not_have_subscription=”1314-ammonia-industry-annual-subscription,1311-ammonia-industry-monthly-subscription,3338-ammonia-industry-30-day-subscription”]

2013 RESTART
COST (reported): $260 million
JOB CREATION (reported): 33 permanent (+210 existing site-wide)— see Job Openings [LINK]
START-UP DATE (reported): 2013

2018-19 EXPANSION
COST (reported): None given
JOB CREATION (reported): None given — see Job Openings [LINK]
START-UP DATE (reported): 2018 urea brownfield

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia	450,000 mtpy	500,000 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: Operational, Planning Phase
The Geismar ammonia plant started up in 1967 but was idled in 2003, due to the high cost of natural gas feedstock. PotashCorp restarted the plant in February 2013 at a cost of $260 million. Air permit documents reveal plans for significant future expansions. In January 2018, Nutrien was formed through a “merger of equals” between Agrium and PotashCorp that was originally announced in September 2016.

2013 RESTART
COST: $260 million
JOB CREATION: 33 permanent (+210 existing site-wide) — see Job Openings [LINK]
START-UP DATE: 2013
LIKELIHOOD: Done — see Methodology

2018-19 EXPANSION
COST: None given
JOB CREATION: None given — see Job Openings [LINK]
START-UP DATE: 2018 urea brownfield, 2019 ammonia estimate
LIKELIHOOD: Likely — see Methodology

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia	450,000 mtpy	1,500 stpd 500,000 mtpy	1,800 stpd	596,020 mtpy total
Urea		0 mtpy NET	875 stpd GROSS BROWNFIELD: 1,550 stpd GROSS	289,732 mtpy GROSS BROWNFIELD: 513,240 mtpy GROSS
Nitric Acid			3,300 stpd +175 stpd new 3,475 stpd total	1,092,704 mtpy +57,946 mtpy new 1,150,650 mtpy GROSS
Ammonium Nitrate			1,975 stpd +225 stpd new 2,200 stpd total	653,967 mtpy +74,503 mtpy new 728,469 mtpy GROSS
UAN		900,000 mpty		900,000 mtpy NET
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] Title V permits, applications, and related documents. Sources: linked below. [4] Adjusted Capacity is in metric tons per year; based on Nutrien’s data and air permit documents. UAN capacity calculated from urea capacity. See Methodology.

FEEDSTOCK: Natural gas
END PRODUCTS: Ammonia, UAN (brandname “URAN”), Urea (liquor), Nitric Acid, DEF

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

2018 Ammonia capacity expansion
Despite receiving air permits in 2014 and 2015 for major brownfield expansions on both the ammonia and urea lines at Geismar, only a small ammonia capacity increase is finally expected to be realized:

PCS Nitrogen plans to complete a modification of the Ammonia Plant Primary Reformer to increase its average and maximum production capacity to 1,800 and 1,850 TPD, respectively.
PCS Nitrogen, Geismar Revised Title V air permit, 23/01/2018

Air permit documents filed from 2014 to 2015 revealed plans that could have increased ammonia capacity by more than 1,150 stpd (380,000 mtpy) to a total of 2,800 stpd, a 70% increase. That expansion would have involved the installation of a KBR “KRES” unit, much like the one PotashCorp recently installed at Lima, OH, at a cost of $210 million.

2018 Urea brownfield
In December 2015, according to revised air permit documents, the scope of the original expansion project was broadened to include the addition of a new 1,550 stpd urea brownfield plant, using technology from Stamicarbon, to replace the existing urea units. The site’s urea capacity had previously been 1,350 stpd, but this was reduced to 875 stpd in 2003, when equipment was removed.

According to the permit application submitted in January 2018, the “new Urea Plant is currently under construction and scheduled to replace the existing plant sometime in May 2018.”

Along with the permitting for the expansions, the company also made site modifications to begin DEF production, with permits describing work to “convert an existing 200,000 gallon tank” from nitric acid / ammonium nitrate storage to DEF storage, as well as building a new 73,000 gallon DEF storage tank. According to permit documents, PotashCorp began using this DEF storage tank in January 2016.

The ammonia expansion had been planned for some time but not implemented: in its Title V permit application from 2014, PotashCorp had said it “anticipates start of construction in February 2015.” By March 2015, PotashCorp “anticipate[s] that we will initiate construction on the new plant sometime in March of next year,” meaning March 2016. In an analyst presentation in December 2015, the company affirmed that it was still “Evaluating additional brownfield expansion at Geismar.” Following the steep decline in prices for ammonia and urea, it seemed unlikely that PotashCorp would even consider making an investment decision before prices have begun to recover. In April 2016, PotashCorp’s credit rating was downgraded by Standard and Poors and, in its Q1 2016 results, the company reduced its 2016 capex guidance by $100 million, from $800-$900 million to $700-$800 million, despite maintaining its dividend. This seems like a good time to plan for the recovery of urea prices, but not a good time to start spending significant capex.

I noted that in KBR’s Q1 2016 earnings presentation, it had high expectations for its “Proprietary Equipment” sector – which includes the KRES technology. In the analysts’ call, KBR described the current opportunities for maintenance and turnarounds, including brownfields in North America, as customers trying to “do as much as they can with the assets they have.”

The capacity of the Geismar plant was derated in the Mineral Yearbook: Nitrogen, 2014 (published November 2016), from 483,000 mtpy down to 450,000 mtpy.

Product from Geismar is shipped out by barge, rail, and truck, although there is also a new ammonia pipeline to supply industrial neighbor Williams Olefins (who opened their rebuilt Geismar facility in February 2015, after the fatal explosion in 2013).

PotashCorp captures the carbon dioxide emitted from the ammonia process and either uses it in urea production (at a rate of 520 stpd, or 16% of the CO2, under “normal operations”), sells it via pipeline to Denbury for enhanced oil recovery (2,100 stpd, or 63%), or simply releases it to the atmosphere (720 stpd or 21%).

The Geismar plant began operating in 1967 under the ownership of Allied Chemical Corporation, now called Honeywell. (Allied was once the biggest ammonia producer in the US, when it started up its 1928 plant at Hopewell, VA.)

In 1984, the Geismar plant was purchased by Arcadian Fertilizer LP. In 1997, PotashCorp “created PCS Nitrogen by acquiring all outstanding shares of Arcadian Corporation for $563.6M and issuing eight million common shares valued at $573.3M.” At the time, Arcadian had been “the largest producer of nitrogen fertilizer in the Western Hemisphere,” with four nitrogen plants in the US and one in Trinidad & Tobago.

After the 1997 acquisition of Arcadian, PotashCorp was “the world’s largest potash company, the third largest phosphate producer and the second largest nitrogen producer in the world.” Before the merger with Agrium, the company simply claimed to be “the world’s largest crop nutrient company.” It also claimed that the Geismar facility was “the largest producer of nitric acid in the US.”

In 2003, PotashCorp had idled the ammonia plant at Geismar due to the high cost of natural gas feedstock – it was cheaper to buy imported ammonia than to produce it on-site. Ten years later, the economics had shifted and PotashCorp announced, in 2011, plans to restart the Geismar ammonia plant.

The restart project cost $260 million ($158 million when announced in 2011), and the ammonia plant started up in February 2013.[/memberful]

View larger map with all ammonia plants.

ADDRESS: 10886 Louisiana 75, Geismar, Louisiana, 70734, United States

WEBSITE: https://www.nutrien.com

REGULATORY SOURCES:

• USGS: Minerals Yearbook, Nitrogen [RECENT / ARCHIVE]
• EPA Emissions data: Greenhouse Gas Emissions from Large Facilities: PCS NITROGEN FERTILIZER LP – GEISMAR AGRICULTURAL NITROGEN & PHOSPHATE PLANT [LINK]
• Risk Management Plan: Right to Know Network: PCS Nitrogen Fertilizer, L.P. [LINK]
• Air Permit documents: Louisiana DEQ (search AI #3732) [LINK]
• US Securities and Exchange Commission regulatory filings: EDGAR Search Results, POTASH CORP OF SASKATCHEWAN INC CIK#: 0000855931 [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]
• 09/12/2016: Agrium / PotashCorp merger presentation: Creation of a World-Class Integrated Global Supplier of Crop Inputs [PDF]
• 09/12/2016: PotashCorp press release: Agrium and PotashCorp to Combine in Merger of Equals to Create a World-Class Integrated Global Supplier of Crop Inputs [LINK]
• 04/28/2016: PotashCorp press release: Q1: PotashCorp Reports First-Quarter Earnings of $0.09 per Share [LINK]
• 04/12/2016: Standard and Poor’s update: Negative Rating Actions On Four Global Fertilizer Companies Follow Weakening Of Market Conditions [LINK]
• 12/01/2015: PotashCorp presentation: Sell-side Analyst Meeting Presentation [PDF]
• 2015: PotashCorp Facility Sheet: Geismar [PDF]
• 04/15/2013: PotashCorp news: Back in the Ammonia Business at Geismar [LINK]
• 02/01/2011: PotashCorp press release: PotashCorp to Restart Geismar Plant [LINK]
• 03/06/1997: PotashCorp press release: Potash Corporation of Saskatchewan Inc. Completes Arcadian Acquisition and Restructures Internally [LINK]