Canadian group joins northern US plains nitrogen plant effort

19 July 2012 20:23  [Source: ICIS news]

HOUSTON (ICIS)--Canada's Keystone Agricultural Producers (KAP) said on Thursday it will become involved in plans to build a $1.5bn (€1.2bn) fertilizer plant in NorthDakota, Minnesota or South Dakota.

"Keystone will have a seat on the board of directors for the proposed plant, and while we will not be investors, we want our members to be involved in the planning of this important project," said KAP's Doug Chorney.

KAP represents 23 commodity groups and more than 7,000 farm families.

The proposed nitrogen fertilizer plant advanced to the next level earlier this month when a steering committee consisting of farmer and industry groups decided to move from the study stage to the planning stage.

"The proposed plant would use natural gas from the Bakken shale oil play and elsewhere in the northern plains as the feedstock to produce nitrogen fertilizer," according to a statement to news media from Tom Lilja, executive director of the North Dakota Corn Growers Association, one of the groups involved in the steering committee.

The steering committee is made up of farm groups representing North Dakota, Minnesota, and South Dakota, as well as the prairie provinces of Canada.

The committee was assembled as the result of a 2011 grant awarded to the North Dakota Corn Growers Association and the department of Agribusiness and Applied Economics at North Dakota State University by the North Dakota Agricultural Products Utilization Commission to study the capture of flared natural gas in western oil fields and its potential to make basic nitrogen fertilizer.

The study determined that local production of fertilizer optimising current and predicted natural gas supply and price is not only economically feasible, but also prudent considering requirements of nitrogen by growers.

Natural gas is the key component in the manufacture of nitrogen fertilizers such as urea.

Natural gas from oil wells in the region is currently flared off.

Preliminary findings of the study concluded there will be abundant availability of natural gas in the northern US plains into the foreseeable future.

Lilja said a fertilizer plant could be online in 3-4 years.

($1 = 0.81)

By: Frank Zaworski
+1 713 525 2653

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