Tag: KBR

Waggaman, LA: owner ramps up, EPC books loss

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.

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Waggaman update: on schedule, on budget, expected Q3

It's refreshing to write an update for a plant where construction is on schedule and on budget, which appears to be the case at Dyno Nobel's ammonia brownfield at Waggaman, LA.

Recently, we've seen delays, cost-overruns, and lawsuits aplenty for projects like US Nitrogen at Greenville, TN, OCI at Wever, IA, and LSB Industries at El Dorado, AR.

But Dyno Nobel's parent company, Incitec Pivot, described progress quite differently during this week's earnings call:

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Pollock, LA – TopChem

UPDATED: 04/01/2017 — see Change Log

OWNER: TopChem Pollock LLC (Investimus Foris / ICOR)
PROJECT: Brownfield ammonia plant

SUMMARY STATUS: Cancelled
In July 2015, the Louisiana governor's office announced that Lithuanian investors intended to build an ammonia plant in Pollock, by retrofitting an idled biodiesel plant. The air permit was issued in December 2016, disclosing project details. Construction was going to begin in 2017 for start-up in 2019 but, in April 2017, the project was "put on hold indefinitely."

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CEO commentary, Q1 2015. Discuss: Will the US be a nitrogen exporter?

If you want to know whether - or when - the US will become a nitrogen exporter, read what the fertilizer company CEOs say during the latest round of quarterly earnings calls.

These guys should have formed pretty solid opinions by now about how the capacity expansions will affect long-term supply and demand, and how they're going to gain/keep market share and competitive advantage. But it can be a challenge to infer what those opinions might be.

I've summarized the pertinent parts of the debate here, with quotes from Agrium, CF Industries, KBR, LSB Industries, OCI, Potash Corp, and Yara.

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Killona, LA – AM Agrigen

UPDATED: 01/02/2017 — see Change Log

OWNER: AM Agrigen Industries
PROJECT: Greenfield ammonia-urea plant

SUMMARY STATUS: Planning Phase
Project redesigned in 2016, now awaiting EPC announcement and revised budget and schedule. Announced in May 2014, this greenfield had been in development since October 2012, with its water permit approved in August 2015, and air permit approved in April 2015. AM Agrigen had publicly announced almost no details, but permit documents detailed scale and technology licensors. Since then, the project has completely changed.

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Freeport, TX — Yara/BASF

UPDATED: 07/19/2017 — see Change Log

OWNER: Yara Freeport LLC DBA Texas Ammonia (Yara / BASF joint venture)
PROJECT: Brownfield ammonia plant

SUMMARY STATUS: Construction phase
"65% complete," and on schedule for start-up in 2017. Yara and BASF held a groundbreaking ceremony in July 2015, five months after the companies confirmed their investment decision and announced details of their joint venture relationship, the EPC contract award, and a 20-year feedstock supply contract.

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Kemper County, MS — Southern Company

UPDATED: 03/05/2017 — see Change Log

OWNER: Mississippi Power Company (Southern Company)
PROJECT: Greenfield power plant, ammonia byproduct

SUMMARY STATUS: Construction phase
Kemper County Energy Facility, a 582 MW power plant, is one of the US DOE's flagship "clean coal" projects. It will produce ammonia as a byproduct of its coal-to-syngas process. The plant has been producing power from natural gas since August 2014, but has experienced profound delays and budget overruns. It isn't operational yet but it will cost over $7 billion.

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American Falls, ID — Magnida

UPDATED: 05/01/2017 — see Change Log

OWNER: Magnida (Magnolia Nitrogen Idaho LLC / Egypt Kuwait Holding Company)
PROJECT: Greenfield nitrogen fertilizer plant

SUMMARY STATUS:
In September 2016, local news reports implied that Magnida was winding down. The project was first announced in 2013, as a revitalized fertilizer version of a power plant initially proposed in 2005. Magnida's equity was originally committed in full, but became uncertain when costs escalated and the project met with resistance, finally the sponsor pulled out and new equity partners could not be found.

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Busy week for Midwest Fertilizer

A flurry of press releases regarding Midwest Fertilizer / Fatima Group’s Mt Vernon greenfield. Contracts to KBR for a 2,200 ton per day ammonia plant, and Jacobs Engineering Group for project management. New details released: confirming my original guess of project scale, at 800,000 tons per year; construction to begin Nov ’14, take three years. I assume delays, so start-up 2018. I still think this project is “possible” – but I won’t call it “likely” until they break ground. KBR booked the contract value (undisclosed) into its backlog for 4Q2013.

Becancour, QB — IFFCO

Ammonia plant: Becancour, QB - IFFCO Canada

UPDATED: 10/24/2016 — see Change Log

OWNER: IFFCO Canada (IFFCO joint venture)
PROJECT: Brownfield urea plant

SUMMARY STATUS: On hold (again)
""Le projet n'est pas mort." In October 2016, IFFCO Canada reduced itself to a skeleton staff, with plans to keep the project "sur la glace" until the urea market recovers. In December 2015, it put the urea plant on hold "until favourable economic conditions prevail." The project had only been "reactivated" in June 2015, having previously been put on "strategic pause" in December 2014. In 2014, its backers coped with snowballing costs and no secure supply of natural gas but, in 2015, it was the market price of urea that dropped too low for the financiers' comfort.

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Beulah, ND — Dakota Gas

UPDATED: 03/07/2017 - see Change Log

OWNER: Dakota Gasification Company (Basin Electric Power Cooperative)
PROJECT: Existing plant, urea brownfield

SUMMARY STATUS: Construction phase
Construction on the new urea plant began in Summer 2014, for an expected start-up in mid-2017. In 2016, however, destructive storms flattened the new urea storage building, which had to be demolished and the foundations ripped out before construction could restart. Start-up is now expected in 2018. Granular urea will be the 11th product made at the Great Plains Synfuels Plant, and the 12th will be DEF.

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Borger, TX — Agrium

Ammonia plant: Borger, TX - Agrium

UPDATED: 04/19/2017 — see Change Log

OWNER: Agrium
PROJECT: Ammonia-Urea Plant, expansion & urea brownfield

SUMMARY STATUS: Ammonia expansion Cancelled, Urea brownfield Operational
In April 2017, Agrium "successfully commissioned" its brownfield urea plant at Borger, which had been under construction since March 2014, more than a year behind schedule and 10% over budget. An expected debottleneck of the ammonia line was cancelled in 2015.

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Tuscola, IL — Cronus Chemical

UPDATED: 06/13/2017 — see Change Log

OWNER: Cronus Fertilizers (Cronus Chemicals LLC)
PROJECT: Greenfield ammonia/urea plant

SUMMARY STATUS: Financing phase
Awaiting financial close, before project is confirmed and construction can begin. Cronus is "still making progress" and now hopes to break ground in 2017, although this has been repeatedly postponed over the last few years.

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Faustina, LA — Mosaic Company

UPDATED: 03/14/2017 — see Change Log

OWNER: The Mosaic Company
PROJECT: Ammonia plant debottleneck and brownfield ammonia plant

SUMMARY STATUS: Planning phase
Mosaic is choosing between a debottlenecking project or an emissions reduction project at Faustina. In October 2013, Mosaic abandoned plans for a $1.1 billion ammonia brownfield plant, because it became "unnecessary" after Mosaic acquired CF Industries' phosphate operations.

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Geismar, LA — PotashCorp

UPDATED: 12/20/2016 — see Change Log

OWNER: PCS Nitrogen LP (Potash Corporation of Saskatchewan / PotashCorp)
PROJECT: Nitrogen plant, restart, expansion and urea brownfield

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 from 2014 and 2015 reveal plans for significant future expansions. In September 2016, Agrium and PotashCorp announced a potential "merger of equals."

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Lima, OH — PotashCorp

UPDATED: 12/20/2016 — see Change Log

OWNER: PCS Nitrogen LP (Potash Corporation of Saskatchewan / PotashCorp)
PROJECT: Nitrogen fertilizer plant, expansion

SUMMARY STATUS: Operational
Announced in 2013, PotashCorp's latest ammonia expansion came online in October 2015 after a 7-week turnaround. The urea expansion came online in 2014. The Lima site has been producing ammonia since 1955. In September 2016, Agrium and PotashCorp announced a potential "merger of equals."

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Mt Vernon, IN — Midwest Fertilizer

UPDATED: 03/09/2017 — see Change Log

OWNER: Midwest Fertilizer Company LLC (Fatima Group)
PROJECT: Greenfield nitrogen fertilizer complex

SUMMARY STATUS: Planning phase
Little forward progress seen since January 2016, when the EPC contract was awarded - but that was tarnished by a corruption scandal and terminated in December 2016. Construction was supposed to begin in mid-2016 for a 2020 start-up; now hoping for groundbreaking in 2017. Modified air permits will likely be awarded soon, but everything depends on reaching financial close, which now depends on getting a new EPC contract.

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Rockport, IN — Ohio Valley Resources

UPDATED: 07/09/2016 — see Change Log

OWNER: Ohio Valley Resources
PROJECT: Greenfield nitrogen fertilizer plant

SUMMARY STATUS: Financing Phase
Air permit granted, September 2013, and extended, March 2015. Two major companies awarded FEED and EPC, December 2013. Financing MOUs in place with foreign investors, February 2014. Nothing public since. "Finalization of project financing has delayed project construction." Any announcement of a new project sponsor - or project abandonment - is unlikely until the status of other, nearby greenfields is confirmed.

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Wever, IA — OCI

UPDATED: 04/27/2017 — see Change Log.

OWNER: Iowa Fertilizer Company (OCI NV / Orascom)
PROJECT: Greenfield nitrogen fertilizer plant

SUMMARY STATUS: Operational
OCI announced the start-up of the ammonia plant in April 2017, but the downstream plants still aren't operational. Despite its first mover advantage, the Wever plant was almost two years delayed and more than a billion dollars over budget. OCI wants to do mergers and acquisitions but isn't having much success: its proposed merger with CF Industries failed in 2016; its buyout of subsidiary OCI Partners LP failed in April 2017; we'll see what they try next.

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