UPDATED: 10/03/2018 — see Change Log

OWNER: CF Industries Holdings Inc (formerly Canadian Fertilizers Limited)
PROJECT: Ammonia-urea plant, Ammonia Expansion[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): 200 permanent — see Job Openings [LINK]
START-UP DATE (reported): 1976

EXPANSION:
COST (reported): None given
JOB CREATION (reported): None given
START-UP DATE (reported): 2018

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia		1,230,000 stpy	[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] CF Industries 2017 Annual Report. Sources: linked below. [3] [Membership required]. Sources: linked below. [4] [Membership required]. See Methodology.

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SUMMARY STATUS:
In operation since 1976, CF Industries’ Medicine Hat plant is the largest ammonia plant in Canada, and the second largest in North America. Although the plant’s capacity was derated in recent years, a bigger expansion is expected as part of the maintenance turnaround scheduled for 2018.

EXISTING PLANT:
COST: $230 million in 1976
JOB CREATION: 200 permanent — see Job Openings [LINK]
START-UP DATE: 1976, 1977

EXPANSION:
COST: Not disclosed
JOB CREATION: None
START-UP DATE: 2018

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia		1,230,000 stpy GROSS 770,000 stpy NET 150,000 stpy Expansion		1,163,659 mtpy GROSS 728,469 mtpy NET 136,078 mtpy Expansion
Urea		810,000 stpy		766,312 mtpy
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] CF Industries 2017 Annual Report, assumes average operation for 350 days per year. Sources: linked below. [3] Permit documents not available online. [4] Adjusted Capacity is in metric tons per year assuming operations for 365 days per year; based on company reports. See Methodology.

FEEDSTOCK: Natural gas
END PRODUCTS: Ammonia, Urea (granular)

RESEARCH NOTES:
CF Industries claims that Medicine Hat is “the largest nitrogen manufacturing complex in Canada,” and second largest in North America, behind CF’s plant in Donaldsonville, LA. (Nutrien also claims to have the largest nitrogen plant in Canada, at Redwater, AB.)

Product ships out by rail and truck.

In December 2015, an ammonia leak killed one contractor – this was, apparently, the first fatality at the site in 31 years. In April 2018, a boiler explosion injured three workers.

Site Capacity, 2018 Expansion
The plant began operations in August 1976 with a 1,150 stpd Kellogg ammonia plant and a 1,500 stpd urea plant. A second Kellogg ammonia plant, with 1,200 stpd capacity, started up in September 1977. In its 2016 10-K report, CF Industries derated (reduced) the site’s ammonia capacity by 20,000 stpy, reducing both the gross and net ammonia.

In August 2018, CF disclosed that a 150,000 stpy expansion of the ammonia line was underway, 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

Plant ownership history
The original $230.2 million project was owned by Canadian Fertilizers Limited (CFL), a partnership between CF, which owned 66%, and Western Co-operative Fertilizers Limited (Westco), which owned 34%.

Westco had been formed in 1964 by three Canadian farmers’ co-ops, Alberta Wheat Pool, Federated Co-operatives Limited, and Saskatchewan Wheat Pool. However, by the time CFL was launched, Federated Co-ops had left Westco and been replaced by another co-op, Manitoba Elevator Pool. In 1998, Alberta Wheat Pool and Manitoba Elevator Pool merged, becoming Agricore (later Agricore United, which ended up with Archer Daniels Midland as a majority owner). Then, in 2007, Agricore United merged with Saskatchewan Wheat Pool, becoming Viterra. Prior to their merger, Agricore United owned 57% and Saskatchewan Wheat Pool owned 43% of Westco.

In 2012, Glencore acquired Viterra in a deal valued at $6.15 billion but, to meet regulatory requirements, arranged the sale of Viterra’s 34% stake of Canadian Fertilizers Limited to CF Industries, for a “total cash consideration of approximately C$910 million.”[/memberful]

View larger map with all ammonia plants.

ADDRESS: 1250 52nd Street NW, Medicine Hat, Alberta, T1A 7N1, Canada

WEBSITE: https://www.cfindustries.com/who-we-are/locations/medicine-hat-nitrogen-facility

REGULATORY SOURCES:

• USGS: Minerals Yearbook, Nitrogen [RECENT / ARCHIVE]
• US Securities and Exchange Commission filings: EDGAR Search Results, CF Industries Holdings, Inc. CIK#: 0001324404 [LINK]

NEWS SOURCES:

• 08/28/2018: Medicine Hat News: CF Industries says production increase won’t require upgrades [LINK]
• 08/25/2018: Medicine Hat News: CF Industries set to boost fertilizer production [LINK]
• 08/22/2018: Reuters: Canada’s ultra-cheap natural gas drives hopes of petrochemical boom [LINK]
• 04/24/2018: Chat News Today: Worker released from hospital following Monday incident at CF Industries [LINK]
• 12/13/2017: Chat News Today: Charges laid against employer following 2015 workplace death [LINK]
• 12/09/2015: Medicine Hat News: Worker succumbs to injuries; fatality CF Industries plant’s first in exactly 31 years [LINK]
• 04/30/2013: CF Industries press release: CF Industries Holdings, Inc. Completes Acquisition of All Interests In Canadian Fertilizers Limited [LINK]
• 08/02/2012: CF Industries press release: CF Industries Holdings, Inc. Announces Agreement to Acquire Viterra’s Interests in Canadian Fertilizers Limited [LINK]