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.
Pipeline of new ammonia plants (2017 update, part 1)
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.
Ammonia plants in the pipeline. Will they, won’t they?
While we wait for the current slate of new ammonia plants to start up this year, here's a reminder of the projects that are still in development across North America.
More than a dozen major ammonia plants are in various stages of planning or financing. None of these have started construction yet. Some have been stuck in limbo for years, while others keep making progress. The project pipeline represents a potential investment of over $20 billion and additional ammonia capacity of more than 9 million tons per year.
Obviously, not every project will move ahead - in fact, conventional wisdom says none will - but new trends are emerging that may influence their success or failure.
A list of the biggest projects follows below, summarizing their evolving costs, pushed-back schedules, and changing EPC contractors.
EuroChem thinks big
EuroChem's Louisiana greenfield looks like it's becoming a big project - much bigger than previously disclosed.
Capex: more than $3.5 billion.
Construction schedule: to start 2016, rolling through 2022.
Annual capacity: ultimately, more than 3.5 million metric tons of product.
If all its plans are realized, this will become one of the biggest nitrogen plants in North America, second only to CF Industries' Donaldsonville complex, by ammonia capacity.
EuroChem greenfield details
EuroChem is working on its air permit and has started submitting documents to Louisiana DEQ - which means we now have confirmation of the proposed size and scope of the plant.
Yes, this is another world-scale greenfield.
No, it's not just ammonia and urea, as previously announced. We also have another major UAN plant on the drawing boards.
Full details and links in my Research Note for EuroChem's greenfield in Edgard, LA.
EuroChem Louisiana: MOU for EPC
EuroChem announced an MOU for the engineering, procurement, and construction of their proposed ammonia-urea plant in Louisiana.
Their US greenfield is one of five projects that they plan to develop over the next ten years, all covered under this MOU: the others are in Russia (an ammonia-urea plant in Nevinnomyssk, an ammonia plant in Kingisepp, and a urea plant in Kingisepp) and Kazakhstan (an ammonia-urea plant in Zhanatas).
These expansions would give EuroChem a gross ammonia capacity of around 8 million mtpy.
EuroChem in Louisiana: “on track” (not shelved)
Yesterday, Bloomberg published an article about EuroChem's Louisiana greenfield ammonia plant with the headline "EuroChem Shelves $1.5 Billion U.S. Plant as Sanctions Bite" ... which is misleading.
EuroChem company reps clarified via e-mail, saying that the Louisiana greenfield "remains on track with its original schedule" and suggesting that the article, which was accurate in its original Russian, suffered from "subjective interpretation by the Bloomberg translator."
Nonetheless, it was quickly picked up in the media, including Green Markets. The article quoted EuroChem CFO Andrey Ilyin:
"The decision on the project is delayed due to changes on the financial markets, namely affected access to credit resources ... The ruble's devaluation also made development of such projects more attractive in Russia."
Greenfield progress in Quebec, North Dakota, and Louisiana
Almost all of the major greenfield ammonia projects have made progress over the last few weeks. Here’s a summary of events, part one.
Seed capital confirmed in North Dakota
Edgard, LA — EuroChem
UPDATED: 08/08/2018 — see Change Log
OWNER: EuroChem Louisiana LLC (EuroChem Group)
PROJECT: Greenfield nitrogen fertilizer plant
SUMMARY STATUS: Planning phase
EuroChem has been planning an ambitious entry into the US fertilizer industry, developing one of the largest nitrogen complexes on the continent. However, there's been no public news of progress since 2017. The company didn't announce many details but the vast scale of the project was disclosed in permit documents, including applications for air and water permits in 2016, both of which are ongoing. EuroChem announced a MOU toward an EPC contract in April 2015. Awaiting the full EPC award announcement and a final investment decision from EuroChem's board.