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Published July 05, 2012, 02:44 PM

$1 billion fertilizer plant moves closer to reality

By: Ryan Johnson, Forum Communications

FARGO, N.D. – Plans are moving along for a $1 billion nitrogen fertilizer plant that could make use of the natural gas now being flared off in western North Dakota’s Oil Patch.

The North Dakota Corn Growers Association announced Monday that a feasibility study has been completed for the plant, with the steering committee of corn growers and fertilizer industry consultants looking at building the facility in North Dakota, South Dakota or Minnesota.

If built, Executive Director Tom Lilja said the plant could produce enough fertilizer to meet the needs of about 12 percent of the existing corn and wheat acreage in the tri-state area.

“We’re still a ways out from that,” he said. “We’re still involved in really the business planning stage and will be evaluating different sites and also be looking at setting up the proper legal structure for farmers to invest.”

Still, Lilja said Monday’s announcement is “the biggest step” in the project, which officials began to study last year after the department of Agribusiness and Applied Economics at North Dakota State University was awarded a grant.

He said the plant would likely be funded with a mix of farmer investments and private interests. But there are “a lot of options,” and investment could come from Canadian producers and farmers outside the area.

Lilja said planners had originally hoped to build a smaller plant, but the feasibility study found the ideal size economically would be a $1 billion facility – more than four times the size of the Theraldson ethanol plant that opened in 2009 just west of Casselton, N.D.

The plant would address two problems, he said – it would use the natural gas that is now largely flared off in western North Dakota while securing local farmers’ supply of fertilizer instead of relying on imports from foreign countries.

“It solves a problem for the energy industry and it solves a problem for the agricultural industry,” he said.

The key component of nitrogen fertilizer is natural gas, and Lilja said companies now in the Oil Patch are expected to start capturing the gas and transport it through pipelines.

“Really, the key to this is there will be an abundant supply of natural gas in the near future,” he said.

Lilja said the plant would take three to four years to finish after construction starts.

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