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Economic conditions favor fertilizer North Dakota plant
Oct. 10, 2012
"The supply of natural gas is increasing and the prices are decreasing," he said. "In the meantime fertilizer prices are rising."
The planned facility would produce 2,200 tons of anhydrous ammonia per day. Anhydrous ammonia is used as a nitrogen fertilizer for farm crops and can be converted into urea and liquefied nitrogen, also used as fertilizer. The plant’s primary input will be natural gas, which will be brought from the Oil Patch by two pipelines.
Enerson told the board that initial planning for the plant began in 2010. Initially, western North Dakota locations were considered that would place the plant close to the supply.
"Operators in the oil fields flare about one-third of the natural gas that comes out of the ground," he said. "The natural gas flares can be seen from the International Space Station."
Flaring the natural gas involves burning it at the site of the oil well rather than gathering it for use.
The 75 billion BTUs of natural gas the Spiritwood Nitrogen Project is scheduled to use each day is still less than the amount of natural gas flared in western North Dakota.
"We can build a pipeline to bring the gas from the west to Spiritwood," he said. "Spiritwood is a good location because it is adjacent to Great River Energy and the anhydrous ammonia markets."
Eastern North Dakota as well as much of South Dakota and Minnesota have become greater markets for nitrogen fertilizer with the increased reliance on corn as a crop. Much of the nitrogen fertilizer produced at the CHS Inc. Spiritwood Nitrogen Project plant will be marketed to farmers through the network of agronomy cooperatives that are members of CHS.
"With the cost and availability of natural gas here, the cost to make fertilizer at Spiritwood is as cheap as anywhere in the world," Enerson said. "The economics look good. Unfortunately we can’t get the plant up and operational immediately."
Feasibility studies are complete and look good, he said. Already under way is a $10 million engineering study that could take about six months.
"Look for groundbreaking in the spring," Enerson said. "Site preparation work for about a year and then the heavy construction starts."
Total construction is scheduled to last about three years with a total of 2,000 workers involved in construction at various stages. Engineers estimate between 400 and 800 may be employed at any one time. Plant production is scheduled to begin in 2016.
Source: Prairie Business
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