North Dakota town denies reduced permit fee for CHS nitrogen plant

11 December 2013 21:11 Source:ICIS News

HOUSTON (ICIS)--Local officials have decided not to modify the fee structure on CHS's proposed $1.5bn (€1.1bn) nitrogen facility in North Dakota despite a request by the company to reduce the building permit cost, officials with the largest US farmer-owned cooperative confirmed on Wednesday.

CHS is in the planning stages for a nitrogen facility located in Spiritwood, North Dakota, that is anticipated to produce 2,200 tons/day (1,996 tonnes/day) of ammonia, with a projected commencement of operations set for the second half of 2016.

The company had requested that the Spiritwood Township Board of Supervisors consider reducing the current building permit fee from the present level of $1 per $1,000 of construction cost. CHS has estimated the construction cost to be at least $1bn of the projected total expenditures, which would result in a $1m building permit fee.

The board decided at its 9 December meeting to not enact changes to the current permit fee structure, even though there was some support from individual members to reduce the cost in order to ensure that CHS would go forward with the fertilizer facility.

The plant is being located in that region to take advantage of abundance of natural gas feedstock resources and will not only produce ammonia but also enhance the company’s ability to distribute urea and urea ammonium nitrate (UAN) liquid fertilizer to the area’s retailers and farmers.

Company officials said that while the decision by the town was not favourable, the project is still progressing forward. The next step is to form a committee to review all the project considerations and address any local issues that arise.

“The permit considered this week by the Spiritwood Township Board of Supervisors is part of the ongoing steps on this proposed project. While we’re disappointed in the decision, we will proceed with formation of a special advisory committee that will include a Spiritwood Township board member,” said Lani Jordan, a CHS spokesperson.

“With this forum, ongoing local questions and issues will be addressed in a timely and responsive manner, keeping all parties involved and working together," Jordan added.

The front-end engineering and design (FEED) study for the plant is almost complete, CHS said on Wednesday, adding that the company intends to make a recommendation to its board and come forth with a definitive decision by early 2014.

($1 = €0.73)

By Mark Milam