BISMARCK — A $1 million state grant has been pledged to a New York company seeking to convert wasted natural gas into much-needed farm fertilizer by using portable plants that can be moved from well to well throughout North Dakota’s Oil Patch.
The state Industrial Commission approved the grant to N-Flex LLC last week, under conditions that include financing commitments from investors.
Company founder Neil Cohn said Wednesday that Easton, Md.-based Beowulf Energy LLC acquired rights to N-Flex and will provide capital and engineering for the project.
Terms of the deal were not disclosed. Cohn said he will “be part of the Beowulf team.”
The state grant would cover about a quarter of the cost of the $4 million pilot program to build plants that could be moved between oils wells in western North Dakota, Cohn said.
A plant will be operational within 18 months, Cohn said.
About a third of the natural gas produced in North Dakota is burned off as an unwanted byproduct because collecting systems and pipelines needed to move it to market have not kept pace with record oil production.
Natural gas also is used to make nitrogen fertilizer, the cost of which has soared and supplies have tightened in the past decade, said Agriculture Commissioner Doug Goehring, who along with Gov. Jack Dalrymple and Attorney General Wayne Stenehjem make up the Industrial Commission.
“Reducing flaring is an issue and we’re cognizant of that — we hate to see a resource wasted,” Goehring said.
The grant awarded to N-Flex comes from a state research fund that is financed by oil and gas taxes. Karlene Fine, the Industrial Commission’s director, said the fund has a balance of $2.7 million. Money for the project would be paid incrementally, as the company meets conditions, including permitting and written confirmation of a buyer for the fertilizer.
According to N-Flex, a single oil well aimed at North Dakota’s rich Bakken or Three Forks formations could produce enough natural gas to convert to more than 3 tons of anhydrous ammonia daily— enough to fertilize 33,000 acres of wheat or 16,000 acres of corn.