Plans for 2 ND nitrogen fertilizer plants moving aheadThe two companies developing nitrogen fertilizer plants in North Dakota say their projects are moving along.
By: Christopher Bjorke , Forum News Service
The two companies developing nitrogen fertilizer plants in North Dakota say their projects are moving along.
Northern Plains Nitrogen is developing a plant near Grand Forks, N.D., and says it is in the process of purchasing a site and is meeting other goals for the $1.5 billion project.
“We’re happy with where we’re at right now,” says Darin Anderson, chairman of Northern Plains Nitrogen.
CHS Inc. says it has applied for air permits for its nitrogen fertilizer plant planned in the Spiritwood (N.D.) Energy Park near Jamestown.
The permits relate to air emissions from the planned plant, involve regulatory approval from state and federal agencies, and could take up to a year to process.
“It is a good sign,” says Jamestown Mayor Katie Andersen. “They are updating the progress they are making.”
In May, Northern Plains announced its plans for a fertilizer plant to produce a variety of nitrogen fertilizer products, with a planned construction start in 2015.
That goal is still feasible, Anderson says, though the project is “maybe a little behind, but not by much.”
The plant is slated to begin production in 2017. Northern Plains officials have said they expect the project to require a workforce of about 2,000 during construction and 135 when the facility is up and running.
CEO Don Pottinger broke down project planning into four intertwined components: Securing a supply of natural gas, purchasing a site, assembling financing and distribution for the product.
He says everything but the financing is arranged. While the other three depend on getting the money to make the project viable, investment will not come until the other components are in place.
“It’s a juggling act that never ends,” he says.
Pottinger and Anderson say Northern Plains’ search for investors will likely become easier after Sept. 23 when federal Securities and Exchange Commission rules change to give start-up companies more freedom in advertising their ventures to potential investors.
The CHS plant would produce nitrogen fertilizer from natural gas produced in western North Dakota. CHS says the plant’s production would be distributed throughout the Upper Midwest and parts of Canada. The plant is estimated to employ from 100 to 150 people when fully operational.
CHS last released a progress statement on its planning process in February. At that time, company officials were studying the availability of water and natural gas for the project.
CHS said in a news release that it is continuing its Front End Engineering and Design study. The study determines if the needed raw materials are available and what permits and design will work best for the project. CHS hopes to complete that process by November. At that point, a final decision on the plant could be made with construction possibly starting in the first half of 2014.
“This is the first time they have publicly stated the early 2014 construction start date,” Katie Andersen says. “They must be growing more confident in that date.”
CHS also says the cost of the project has risen from earlier estimates of $1.2 billion to $1.5 billion.
Falling into place
Darin Anderson of Northern Plains says the remaining pieces of the project are falling into place.
The company is purchasing land next to Grand Forks’ municipal sewage lagoons north of the city and east of the Interstate 29 interchange at North Washington Street. The company also has an agreement with the city to take 6.8 million gallons of wastewater per day from the lagoon.
The project also has secured its supply of natural gas, Anderson says, the primary feedstock for producing nitrogen. The abundance of natural gas being produced, and often burned off as a waste product, in North Dakota’s Oil Patch makes the resource cheaper in the state and the venture more viable, he says.
“There’s so much supply out there, it softens the price,” he says.
The cost of natural gas generally accounts for 80 percent of the production cost of nitrogen fertilizer, according to Northern Plains.
The plant will receive gas through an existing pipeline near the project site or directly from the Oil Patch through a proposed pipeline, Anderson says.
“Those two are the big ones,” says Anderson, referring to natural gas and land.
While Pottinger says the construction of the plant is not yet certain, nothing has happened to derail it.
“There’s been speed bumps, not roadblocks,” he says.