Tag: North Dakota

Ammonia prices are low (so start building your ammonia plant now)

THIS UPDATE IS ONLY AVAILABLE TO SITE MEMBERS

In 2012, when US Nitrogen broke ground on its new plant in Tennessee, the resurgence of the North American nitrogen industry was just beginning. Ammonia sold at high prices but, thanks to the shale gas revolution, the natural gas feedstock was cheap. As a result, profit margins were high and forecasts were rosy.

Now, it's different. Ammonia and its derivatives don't command high prices, which makes it a poor time to begin operating an expensive new plant - but those same low prices might make this a good time to begin construction.

Recent news regarding both completed and future projects illustrate the sometimes painful relationship between product pricing in a cyclical industry and the timing of investment decisions.

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Pipeline of new urea expansions (2017 update part 2)

2016 was a transformative year for the North American ammonia industry but, in 2017, the bigger impact will be on the urea industry.

Here's an update on four urea expansions expected on-stream this year and next, which will add almost two million tons of new urea capacity. In the process, they'll reduce the amount of ammonia that's available for sale by more than one million tons.

And, as a bonus, I have news on an embattled "clean coal" project that, in what might be a last gasp attempt at a viable business model, could potentially add another 1.5 million tons of urea in Texas.

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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.

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Beulah, ND — Dakota Gas

UPDATED: 11/14/2017 - 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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Grand Forks, ND — Northern Plains Nitrogen

UPDATED: 12/13/2017 — see Change Log

OWNER: Northern Plains Nitrogen (NPN)
PROJECT: Greenfield nitrogen fertilizer plant

SUMMARY STATUS: Planning phase
World-scale greenfield project led by farmers' co-ops. Seed capital raise exceeded expectations, January 2014. Water permits approved, December 2014; air permit approved, August 2015. Thereafter, project severely delayed: fund-raising was complicated by the commodity price drop. "NPN cannot complete the project without significant new financial partners." Awaiting FEED study, EPC contract, and financial close.

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Spiritwood, ND — CHS

UPDATED: 08/24/2015

OWNER: CHS Inc
PROJECT: Greenfield nitrogen fertilizer plant

SUMMARY STATUS: Cancelled
CHS gave its $3.3 billion greenfield the green light in September 2014, and cancelled it in August 2015. The project faced intractable issues securing an adequate supply of water, and was beset by spiraling costs. CHS is purchasing a minority stake in CF Industries instead.

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