In an attempt to leverage the state’s two biggest industries, North Dakota is considering construction of a world-scale, $1.5 billion nitrogen fertilizer plant. The plant could make use of some of the state’s natural gas now being flared in the face of low prices to fuel the facility, while the North Dakota Corn Growers Association (CGA) would use the plant to make anhydrous ammonia.

Gov. Jack Dalrymple this month encouraged the state’s agricultural leaders to invest in new natural gas processing infrastructure near existing Bakken Shale oil/gas fields to facilitate a new fertilizer plant.

“While we continue to supply the nation with high-quality natural gas, we can also continue to add value right here in North Dakota,” said Dalrymple, following a mid-month meeting with agriculture leaders. More diversification of the state’s economy, stronger agriculture and a further reduction in the amounts of flared gas could all come from the fertilizer plant development, he said.

Building plants near the state’s burgeoning reserves would help ensure the long-term feasibility of the fertilizer facility, and the region’s farmers would have a stable domestic supply of fertilizer, which for the most part currently is imported and subject to periodic supply problems and price spikes, according to a spokesperson for the governor.

CGA President Darin Anderson told local news media that his organization is attempting “to bring two of North Dakota’s most important industries together,” seeking to make supplies of gas that are now flared useful for the state’s agricultural industry. He envisions a plant that could produce up to 2,200 tons of fertilizer each day, but Anderson did not disclose the proposed location being considered.

About 90% of the world’s fertilizer is produced from natural gas, and gas production in North Dakota continues at a record pace, hitting nearly 700 MMcf/d in May, according to the most recent statewide statistics from the Department of Mineral Resources (see related story).

“We expect natural gas production to grow substantially in the next few years,” said State Pipeline Authority Director Justin Kringstad. “That means we will have excellent opportunities for value-added industries in North Dakota.”

Anderson said the Bakkan supplies played a role in doing a state-funded feasibility study to bring a fertilizer plant into the tri-state region (Montana and the Dakotas) where there is only one current plant operating, Cenex in Beulah, ND, serving the overall upper Midwest region.

“By converting more natural gas to fertilizer, we can further diversify our economy,” Dalrymple said. Anderson is recommending his farm operating members invest in the plant to push back against ever-higher nitrogen fertilizer prices.