Dyno Nobel International announced on May 23 that Waggaman, La., is the site for an $800 million ammonia production facility that the company is considering. Dyno Nobel will complete a $30 million feasibility study on the project, with the proposed plant slated to produce 750,000 mt/y at Cornerstone Chemical Company’s existing complex on the west bank of the Mississippi River in Jefferson Parish.
The announcement was made by Louisiana Gov. Bobby Jindal and Simon Atkinson, president of Dyno Nobel International, and comes after Australian company Incitec Pivot Ltd. (IPL), the owner of Dyno Nobel North America, earlier reported that it was studying the project to leverage low-cost U.S. natural gas and backward integrate the entire ammonium nitrate production of the business (GM May 21, 2012).
Atkinson described the proposed facility as "a strategically compelling world-scale ammonia project that would take the Dyno Nobel global explosives business back to low-cost U.S. gas economics." If the feasibility study confirms proceeding with the facility, Dyno Nobel will announce a decision to move forward with the project in the first half of 2013, with initial production slated for late 2015.
Cornerstone already produces acrylonitrile, melamine, and sulfuric acid at the Waggaman complex, and the ammonia plant would be integrated with Cornerstone’s existing infrastructure. An ammonia plant once operated at the site before closing more than a decade ago.
"The plant is on a brownfield chemical complex site," Atkinson said. "The site currently has several downstream chemical plants operating and one that would off-take ammonia from the plant. In addition, it has a capital advantage, as the infrastructure for the ammonia plant already exists."
Louisiana Economic Development’s Business and Expansion Retention Group began discussing possibilities with the companies in April 2011, and has been working on the project with the Jefferson Parish Economic Development Commission. To secure the project, the state will offer a competitive incentive package to be finally negotiated at the conclusion of the feasibility study.
"We are excited to welcome Dyno Nobel to Louisiana," said Greg Zoglio, CEO of Cornerstone. "The U.S. Gulf Coast economic model has changed due to the advent of advanced drilling and extraction techniques and the associated impact on natural gas pricing. Dyno Nobel’s foresight of this paradigm shift, coupled with the brownfield offering by Cornerstone Chemical Company and project support provided by the State of Louisiana, will allow the resurgence of world-class ammonia production in the state."
"Dyno Nobel’s interest in building a new facility here speaks volumes about the affordable, abundant supply of natural gas across Louisiana, the performance of our energy markets, the state’s strong business climate, and our world-class workforce,” said Gov. Jindal. “With the new production of unconventional natural gas plays in Louisiana, more and more companies are recognizing that our state is uniquely positioned to provide major supplies of natural gas to companies all over the country. We’re confident that when the company’s due diligence is done and a formal investment decision is made early next year that this project will move forward and bring tremendous economic benefits to this region."