Ag industry pleased with CHS fertilizer plant approval

FARGO, N.D. -- North Dakota farmer-leaders say they're happy CHS Inc. has decided to re-engage in a proposed $3 billion fertilizer project in Spiritwood, N.D., near Jamestown, N.D.

It is the single largest private investment project in North Dakota history, and the largest for CHS.

CHS, the nation's largest farmer-owned cooperative, announced Sept. 5 that the board approved the plant, which will convert natural gas into nitrogen fertilizers. In April, CHS had announced it was delaying what was then projected as a $2 billion plant because of increased construction costs.

"With this decision, CHS is taking an important, strategic step on behalf of its membership owners by ensuring them with a reliable domestic supply of nitrogen fertilizers essential to help farmers raise healthy, profitable crops," CHS CEO Carl Casale said in a press statement.

The Spiritwood plant is planned on a 640-acre site, to the east of the Spiritwood Energy Park. It is designed to produce more than 2,400 tons of ammonia daily in the forms of urea and urea and ammonium nitrite (UAN) liquid fertilizer. The plant is expected to be up and running in the first half of 2018 and is expected to employ 160 to 180.

Surprise on size

Mark Watne, president of the North Dakota Farmers Union in Jamestown, says his organization started looking at the feasibility of this kind of plant three years ago and soon brought in CHS, which took the project over because of its size and expertise.

Watne says he didn't learn about the 50 percent increase in the cost of the project until Sept. 5. He suspects it is because CHS increased its production goal from 2,000 tons per day to 2,400 tons per day, and added diesel exhaust fluid (DEF) to its production plans. DEF is an additive to improve diesel exhaust emissions.

"I'm just as excited as heck," Watne says, adding farmers who purchase the products can receive dividends.

Mike Clemens, a Wimbledon, N.D., farmer and member of the North Dakota Corn Growers Association board of directors, says the Spiritwood plant is "great for the state to give us an avenue for taking the gas that's being flared off and use some of that gas to make fertilizer."

He says it's also great for the farm community to have another source of fertilizer, in light of the rail car shortages.

"It can be nothing but great news for farmers in the area."

'Historic investment'

"...The CHS plant complements our continued efforts to utilize and add value to the abundant supplies of natural gas produced in western North Dakota," says North Dakota Gov. Jack Dalrymple.

Dalrymple and the North Dakota Department of Commerce have worked to assist the project since CHS started studying its feasibility in 2012.

U.S. Sen. John Hoeven, R-N.D., called the plant good news for the state and for farmers. He says the plant is expected to reduce the carbon dioxide emissions by 592,000 tons per year.

Rep. Kevin Cramer, R-N.D., called the project a "historic investment that will shape the future development of North Dakota agriculture and energy."

No impact on NPN plant

Darin Anderson, chairman of Northern Plains Nitrogen LLP, says the CHS announcement has no impact on his company's plans for a 1.5-million-ton fertilizer plant in Grand Forks, N.D.

Northern Plains Nitrogen is working on completing preliminary feasibility studies. Originally, the two plants were discussed as being roughly the same size and scope, but the Northern Plains Nitrogen project is estimated at $1.85 billion. The company could start moving dirt in the fall of 2014, with production starting in 2018.

Anderson says the CHS announcement is no surprise because the region could have three plants of that size and still import nitrogen fertilizer. He says the near "catastrophe" this spring for co-ops and others bringing fertilizer into the state underlines the benefit of regional production.

The Grand Forks city Planning and Zoning Commission on Sept. 3 approved the company's plans, including annexing 340 acres at North 55th and 54th Avenue. The plans must be approved by the city planning commission and city council.

"If both plants were built, it would mean more fertilizer in our areas for producers," says Larry Hoffman, a Wheatland, N.D., farmer and secretary-treasurer for the project. "The area can absorb the fertilizer from more than two plants. It'll give us something we never had before -- production in the area."