Plans for a major natural gas-fed fertilizer plant in North Dakota were re-energized Friday when the board of directors for the sponsoring agricultural cooperative voted to move ahead with plans for the $3 billion project that bids to soak up some of the wellhead gas being flared as part of the Bakken shale boom. The project had been on hold because of construction and labor cost concerns.
Setting aside delays announced earlier this year (see Shale Daily, April 4), the oversight board for St. Paul-based CHS Inc., the largest U.S. agriculture cooperative, put the massive fertilizer plant back on track. A groundbreaking will be held following the completion of added details, and the major gas feedstock project should be fully operational by the second half of 2018, the board said.
Located on 640 acres northeast of Jamestown, ND, the proposed CHS fertilizer plant would employ 160-180 people and produce 2,400 tons of ammonia daily that would be further converted to urea-based fertilizer and diesel exhaust fuel. Most of the nitrogen products from the plant will serve farmer-owned cooperatives and independent farm supply retailers within a 200-mile radius of the plant in the Dakotas and parts of Minnesota, Montana and Canada.
The ambitious project, which would be the largest CHS investment ever, was placed in serious doubt earlier this year when CHS delayed indefinitely its plans, saying that there was no timeline for the project being restarted (see Shale Daily, April 2).
CEO Carl Casale said the board's decision to move forward as the project’s lone investor "is a strategic step on behalf of its member-owners by ensuring them a reliable domestic supply of nitrogen fertilizers essential to farmers.” The cooperative will still seek partnerships and ownership of strategic assets that will add value to the cooperative's businesses, he said.
The proposed fertilizer plant near Spiritwood Energy Park is expected to required 88,000 MMBtu/d of gas, 40 MW/d of electricity and 2,400-2,700 gallons/minute of water.
CHS first outlined its plans for the plant two years ago, but in April its backers postponed the final go-ahead decision because of what they described as construction and labor costs exceeding estimates.
"Because of the size and scale of this investment, we needed to take additional time to review costs and reassess areas in which we could make modifications," said Casale, noting the cooperative is now fully prepared to proceed. "[This investment] will add tremendous values...and further expand our global crop nutrients business platform."
The project, which was originally billed as a $1.2-1.4 billion endeavor producing 2,200 tons of ammonia daily, was always welcomed by North Dakota state officials from the governor on down because of its potential to cut into the stubbornly high flaring volumes plaguing its shale oil/gas boom (see Shale Daily, Sept. 14, 2012).