OCI looking to expand Texas nitrogen output and create renewable fuel plant

Author: Mark Milam


HOUSTON (ICIS)--Fertilizer producer OCI is looking at expanding its existing ammonia and methanol complex located near Beaumont, Texas, by adding increased nitrogen production.

The company is also planning a renewable fuel plant which will convert lumber waste synthesis gas which would then be turned into methanol that OCI would utilise to create renewable gasoline.

The investment would see $2.8bn dedicated to the fertilizer upgrades and $2.075bn for the fuel project according to filings with the Texas comptroller’s office. OCI has not commented on the matter at this time.

OCI filed applications under its newly formed OCI Clean Ammonia and OCI Fuels USA via a state program titled Chapter 313 which provides companies which are undertaking certain industrial projects can make agreements with the local school district to reduce tax burdens.

OCI said it is currently evaluating the development of the project not only in Texas but at its operations in Wever, Iowa, and that it is weighing several factors, including return on investment, which is directly impacted by cost of operations.

It noted that a property tax burden represents a significant operational cost and based on their economic modelling, incentives will be significant factors in a final investment decision.

“As such, securing a Chapter 313 appraised value limitation is critical to establish a rate of return competitive with other investment opportunities, and is a determining factor affecting applicant’s final investment decision to construct and operate the proposed project in Texas,” said OCI in the filings.

The Chapter 313 appraised value limitation is projected to result in $208,880,920 of tax savings with the company committing to create 10 new jobs from this expansion.

OCI said construction is expected to take 24-30 months, with commissioning and start up to follow but the facilities are expected to be fully operational in 2027.

The project will involve the construction of two 3,000 tonnes/day ammonia units and would be an ammonia synthesis expansion via two additional loops.

The project also envisions installing a 2,200 tonne/day urea plant next to the ammonia facilities, converting part of this ammonia together with carbon dioxide to urea.

The end-product will be a urea solution of 72% urea in water that will be converted to Diesel Exhaust Fluid (DEF) in various concentrations. This can also be converted to urea ammonium nitrate (UAN) volumes.

To facilitate the UAN production, a nitric acid plant will also be built with a capacity of 1,530 tonnes/day. For the storage needed for the additional output OCI said various storage tanks will also be built.