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Latest Ag News
September  19, 2012

                The First Major Ammonia Plant in 30 years will go on line in 2016.

Related News Article Link HERE
 
September 19, 2012
, Spokane.
 

CHS (Cenex Harvest States) proposes a 1.4 Billion Dollar plant at Jamestown, ND area, (Spiritwood). This will be one the largest Ammonia plants ever built in the US…..about 8% of the present US production.  

This is a big bet for CHS, (Cenex Harvest States, 1931). This is a chance to come back from the loss of Farmland, a sister cooperative. The Farmland Cooperative got sidewise in the NH3 market about 10 years ago. Farmland sold off 4 plants to Koch Industries of Wichita, KS….and Koch also purchased the Simplot NH3 plant in Brandon, Manitoba about the same time.  The real winners in this development are the crop producers of the Northern Tier.  

Stranded Natural Gas in Western North Dakota and Eastern Montana will fuel the plant. Considerable Stranded Natural Gas is being flared off in the Williston, Basin. Around Keene, ND to Newtown, ND the night time sky is lighted with natural gas flares. These western counties have their own special street lights from the last century.   

Natural Gas at $2.00 to $2.50 per 1,000 cu.ft will require $82.00 of feedstock per ton of NH3.  NH3 is presently selling for about $800 per ton in North Dakota.  This means paid for NH3 plants like Koch purchased from Farmland (about $500 million) has an absolute breakeven point of about $100 to $120 per ton of NH3.  

At other locations such as Hugoton, KS/Dodge City, KS ammonia is retailed by Coops for about $750 per ton. At least four ammonia plants are located within 400 miles of this location.  

A new plant obviously must pay back the investors with a good return...At $800 per ton with a capacity of 800,000 tons per year results in a cash flow of $640,000,000 per year. With such a large margin the plant could be paid off in very short order if the NH3 price holds. NH3 pricing is anticipated to hold with large margins for another 5 to 10 years.  

In 2010 the US consumed about 16.8 million metric tons primarily for crop production….about 10.083 metric tons were built in the US and 6.74 million tons were imported. About 60% is built in the US. The impact is significant for this very large plant…about 8% addition to the total US market. 

North Dakota is becoming the most advanced energy state in the nation. Ethanol production is significant and success is assured with low cost NH3 providing a low break-even point for corn.  

The US uses about 16.8 million metric tons per year. About 6  million metric tons of 82% N is directly applied to the soil. About 40% is imported into the US by Canadian companies such as Potash Corp and Agrium. Potash was recently in court with Federal Regulators for Anti Trust and Price Fixing violations. Does Agrium have a similar problem? 

In the future fewer ammonia plants will be required due to improved process of application. Ammonia application is improved with new TAPPS and TAPPKTS processes from Exactrix, A Spokane based company provides application systems around the world for directly applied NH3. Typically the new Exactrix TAPPS process combining NH3 with liquid Phosphate, Sulfate and Potassium Hydroxide makes the NH3 166% more crop available.  Every farmer is interested in improved efficiency.  

The Jamestown (Spiritwood) plant transportation shadow will drive the market for NH3 in about a 450 mile radius.

In the Pacific Northwest NH3 produced primarily by Agrium is selling for about $1,200 per ton.  

Who are the engineers and builders…typically Kellogg, Brown and Root (Texas) or Krupp (Germany) are the two major suppliers of the single train compressor and process control. CHM2Hill is the project manager from Houston, Texas. 

This is North Dakota's second Ammonia Plant in 30 years.  

No need for Casinos in North Dakota, the whole state is a Casino. There are some big betters with NH3. 

North Dakota's first ammonia plant at Beulah, ND is coal fired and was pioneered by the TVA (Tennessee Valley Authority). 

North Dakota will have the most modern and advanced plants in the nation when compared to the Gulf States and High Plains states.   

Ammonia has also been proposed as a clean burning fuel for large engines. Ammonia is economically transported via pipeline with a very good safety record.  

Ammonia is the most hydrogen dense molecule that is easily transported and or stored.  

Ammonia is non-explosive and it is an inhalation hazard.  

Very few people are employed in the manufacture of NH3…about 2,200 people work in ammonia plants in the US producing a cash flow of around 6 billion to 8 billion dollars per year.  

Manufacture of NH3 is regarded as the Number 1…most significant technological development of the last 200 years.  

Our society as we know it….was totally transformed by introduction of low cost nitrogen fertilizer.  

Shell Engineers at Pittsburg, California in 1944 laid the ground work for NH3 to be directly applied to the land.  

Guy J Swanson
Your Great Plains Reporter.


People to call at Exactrix®

Guy Swanson
No-Tillage expert, Engineer
Exactrix Global Systems
509.995.1879
E-Mail:exactrix@exactrix.com

 

TBA
National accounts, sales and marketing
Exactrix Global Systems
509.535-9925
E-Mail:

Exactrix Global Systems LLC
4501 East Trent Ave.
Spokane, WA 99212
(509) 535.9925  fax(509) 535.9989
E-Mail exactrix@exactrix.com