US Mosaic may build $700m ammonia plant in Louisiana

21 December 2012 21:29  [Source: ICIS news]

Mosaic may build $700m ammonia plant in LouisianaHOUSTON (ICIS)--US-based fertilizer producer Mosaic may build a $700m (€532m) ammonia plant at its Faustina site in St James parish, Louisiana, the company said on Friday.

Mosaic is beginning front-end engineering and design work, and it could make a final investment decision in mid-2013, the company said.

If Mosaic goes ahead with the project, construction would start in 2014, and operations could begin in early 2016, the company said.

The plant would nearly triple the ammonia that Mosaic makes at its Faustina site, the company said. The extra ammonia will go to Mosaic's fertilizer operations in Florida.

The ammonia currently produced at Faustina is combined with phosphoric acid to produce fertilizer. The phosphoric acid is produced at Mosaic's nearby Uncle Sam site.

Mosaic is considering the project because of low-cost US natural gas. Natural gas is a feedstock for ammonia.

"Louisiana not only has these favourable natural gas prices right now, but energy forecasts show the wide split between the price of oil and natural gas continuing well into the future, which means there will be more and more companies who want to invest here and create jobs," according to a statement by Bobby Jindal, Louisiana governor.

"It's part of the renaissance that chemical and energy industries are experiencing right now in Louisiana, and we will continue to make sure we are fostering an environment where more companies want to invest and create jobs for our people," Jindal said.

To secure the project, the state will offer Mosaic a tax credit worth $3m. In addition, Mosaic could use Louisiana's Quality Jobs and Industrial Tax Exemption incentive programmes.

Mosaic joins a growing number of companies considering or building ammonia plants in the US.

Illinois-based CF Industries announced 1 November that it plans to spend $3.8bn on new ammonia and urea/urea ammonium nitrate (UAN) units at locations in Louisiana and Iowa.

CF said its board has approved budgeting $2.1bn for building new ammonia, urea and UAN plants in Donaldsonville, Louisiana, and $1.7bn for new ammonia and urea plants in Port Neal, Iowa.

The company expects the plants to start production in 2015 and 2016.

The two projects will produce 2.1m tonnes/year of ammonia, 2.0m-2.6m tonnes of granular urea and up to 1.8m tonnes of UAN solutions, CF said.

Meanwhile, CF is in the midst of a $1.5bn debottlenecking effort at several of its existing ammonia plants

Abundant natural gas from North Dakota's Bakken shale formation also prompted a consortium of commodity groups in the northern plains, including the North Dakota Grain Growers Association, to announce plans for the construction of a $1.5bn nitrogen fertilizer plant to be located in the Williston Basin.

Canada-based Agrium said on 7 November that it is close to naming a location in the Corn Belt for a proposed new nitrogen fertilizer plant.

Agrium's board of directors is expected to approve budgeting for the greenfield project sometime prior to June 2013.

Missouri and Kentucky are likely candidate locations, sources said.

Norway-based Yara has said it is considering building a nitrogen fertilizer plant in Belle Plaine, Saskatchewan, to produce urea, UAN, and diesel exhaust fluid (DEF).

North America's largest agricultural cooperative, Minnesota-based CHS said it is taking steps toward construction of a more than $1bn nitrogen fertilizer manufacturing plant to be located at Spiritwood, North Dakota.

The CHS plant would be designed to produce 800,000 tonnes/year of ammonia.

CHS is investing $10m in this first feasibility phase.

The Egyptian group Orascom Construction Industries (OCI) is building a new nitrogen fertilizer complex in Weaver, Iowa.

The new complex will be run by Iowa Fertilizer Company, a wholly owned subsidiary of OCI.

The $1.4bn project will have a 1.5m-2.0m tonnes/year capacity to produce ammonia, urea and UAN.

Construction work is scheduled to begin before the end of 2012 and the complex will open in mid-2015.

($1 = €0.76)

Additional reporting by Frank Zaworski

By: Al Greenwood
+1 713 525 2645

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