Orascom Construction Industries (OCI), Egypt's largest company, on Wednesday agreed to make the largest single investment ever in the state of Iowa -- $1.4 billion -- to build a nitrogen fertilizer plant that would tap U.S. natural gas supplies.
The proposed plant site in Lee County was chosen over a competing site in neighboring Illinois. The Iowa Economic Development Authority awarded OCI $26 million in tax credits and a $133 million property tax exemption from the Lee County Board of Supervisors over 20 years.
Iowa, which is the highest-yielding corn state in the United States, also is the largest consumer of nitrogen fertilizer. The United States now imports more than half of its nitrogen-based fertilizer. The Iowa plant would promote what supporters called "food independence."
OCI subsidiary Iowa Fertilizer Co. would develop the plant with assistance by KBR, Maire Tecnimont Stamicarbon and ThyssenKrupp Uhde. When completed, the plant would yield an estimated 1.5-2 million metric tons of ammonia, urea and diesel exhaust fluid a year.
OCI's project "is the largest investment ever made in our state," said Iowa Gov. Terry Branstad. "The Iowa Fertilizer Co. will bring high-paying, permanent jobs to Lee County and will create approximately 2,500 construction jobs over the next three years."
The fertilizer plant site would be about four miles from the Mississippi River, which would provide easy access to the Corn Belt.
"We believe this major capital investment will help invigorate economic development in an area of the state which has previously experienced significant challenges," said Branstad.
OCI is one of the largest fertilizer manufacturers in the world, employing more than 72,000 people. Revenues approached $5.5 billion in 2011.
The Natural Gas Supply Association said in an outlook report in June that record-setting U.S. gas output and storage was contributing to a "manufacturing renaissance" as industries used the competitive advantage to "build, reopen and expand fertilizer, petrochemical and steel facilities" (see Daily GPI, June 6).
Several petrochemical projects have been proposed for the Gulf Coast and in the Marcellus Shale region because of abundant gas supplies (see Daily GPI, July 30; May 1; March 16). In addition, North Dakota officials recently said they were considering a proposal to turn some of the state's flared gas from the Bakken Shale into fertilizer for the agricultural industry (see Daily GPI, Aug. 17).
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