The urea brownfield in Beulah, North Dakota, has been under construction since mid-2014. It didn't start-up in early 2017, as originally scheduled, but it is now, finally, more-or-less finished, and its owners have announced a new schedule for the start of production.
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.
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.
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.
The last few months have seen progress on the two big North Dakota greenfields: Northern Plains Nitrogen in Grand Forks, ND and CHS in Spiritwood, ND.
One has water, the other has money.
In the next few months, they each might have both - or not ...
UPDATED: 10/01/2018 - see Change Log
OWNER: Dakota Gasification Company (Basin Electric Power Cooperative)
PROJECT: Existing plant, urea brownfield
SUMMARY STATUS: Operational
Dakota Gasification Company's new urea plant started up early in 2018, when granular urea became the 11th product made at the Great Plains Synfuels Plant (DEF became the 12th). Fertilizers now represent more than 50% of the entire plant's expected revenues. Construction on the new urea plant began in Summer 2014, and would have been completed by mid-2017 but destructive storms flattened the new urea storage building in 2016, which had to be demolished and the foundations ripped out before construction could restart. A small ammonia expansion was completed during the project.
UPDATED: 03/07/2016 — see Change Log. No further updates expected.
OWNER: Agrebon
PROJECT: Brownfield urea plant
SUMMARY STATUS: Cancelled
Agrebon is no longer developing the Casselton plant. There have been no announcements regarding this site since April 2013. The team behind Agrebon regrouped as Bayotech, which continues to develop small-scale, modular ammonia reactors but shifts the team's focus away from biomass feedstocks.
UPDATED: 05/14/2018 — 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. Awaiting FEED study, EPC contract, and financial close. In April 2018, the project was reportedly still "alive and well ... [although] we’re definitely not where we thought we’d be."
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.