All posts by mickeybarb@charter.net

Karnalyte Eyes Cost Cuts, N&K Partners

News, News Briefs, Nitrogen, Potash, Saskatchewan

Junior potash and nitrogen producer Karnalyte Resources Inc., Saskatoon, said on June 23 that results from its recently completed strategic review, completed by MNP LLP, show that going forward it needs to cut costs and find partners for its proposed Nitrogen Project and Wynyard Potash Project.  

The review recommended the company transition Karnalyte to a low-cost operation by developing and implementing a minimum cash flow budget to preserve available cash for investment in seeking out strategic industry partners. It said the company needs to investigate alternative sources of funding to extend its operational runway, monetize existing assets to preserve a financial and liquidity foundation, and maintain the minimum requirements to sustain an exchange listing.

In response, management said it intends to investigate alternative sources of funding, divest certain assets not essential to the potash project, reduce general and administrative expenses, and potentially move Karnalyte to the TSX Venture Exchange to reduce the higher regulatory and cost burdens on the TSX.

The review said the Nitrogen Project is high risk without both an offtake agreement and a joint or independent capital investment given the current market and competitive conditions. Current major Karnalyte shareholder India’s Gujarat State Fertilizer and Chemicals Ltd. (GSFC) has indicated it is not in a position to act as lead partner on the project, but that it stands willing to act as a technical advisor, drawing on its experience as the operator of nitrogen production facilities. Plans are for the small-scale project to produce 700 mt/d of ammonia and 1,200 mt/d of urea.

In addition, per the recommendations of the report, the company will continue to seek out and attract a major industry partner with a sound financial position and long-term strategic vision to assist with the Wynward Potash Project.

Despite improvement in supply and demand and prices in the potash industry, the review also cited unfavorable market conditions as current potash prices, low interest from financial institutions, and the limited capacity from the company’s own shareholder group. Current shareholder GFSC has an agreement to take 56 percent of the project’s offtake over 20 years of phase 1 production (625,000 mt/y).

Despite the increase in potash prices in 2021 and expectations that demand will continue to grow through 2030, the review also said the market is expected to be in a prolonged state of oversupply from new mines in Belarus, Russia, and Canada (BHP Jansen).

Alberta Carbon Grid Could Benefit Province’s Fertilizer Producers

Alberta, News, News Briefs

Pembina Pipeline Corp. and TC Energy Corp., both based in Calgary, Alta., have announced plans to collaborate on a massive carbon transportation and sequestration infrastructure project that will be able to transfer more than 20 million mt of carbon dioxide per year when completed, potentially having a significant impact on Canadian fertilizer operations.

Both major energy companies operate pipeline networks that transport crude oil, natural gas, and liquid natural gas. Pembina recently agreed to acquire Inter Pipeline Ltd., a Calgary multinational petroleum transportation and infrastructure company, for approximately C$15.2 billion.

TC Energy announced on June 9 that its controversial $8 billion Keystone XL Pipeline connecting the Western Canadian Sedimentary Basin in Alberta to refineries in Illinois and Texas, plus oil tank farms in Oklahoma, has been officially terminated after U.S. President Joe Biden signed an executive order in January revoking its permit.

The Pembina/TC Energy CO2 distribution project will be built around a new sequestration hub called the Alberta Carbon Grid (ACG), which will connect existing pipelines through an open-access system linking the Fort McMurray region, the Alberta Industrial Heartland, and the Drayton Valley region. The first ACG phase tentatively will operate as soon as 2025, with project completion set for 2027.

The grid would connect Alberta’s largest sources of industrial emissions to a sequestration location northeast of Redwater. Future legs could extend to Joffre, Christina Lake, Cold Lake, or Swan Hills.

There is a great deal of fertilizer production located in Alberta, including Redwater and Joffre (Nutrien Ltd.) and Fort McMurray (Chemtrade Logistics Income Fund).

The open-access system is designed to scale up to more than 60,000 mt of CO2 per day capacity, or 20 million mt per annum, representing about 10 percent of Alberta’s industrial emissions.

“Pembina is proud of our commitment to all stakeholders and pleased to leverage our expertise to provide a key market solution toward a lower carbon economy with another industry leading partner,” Pembina CEO Mick Dilger said, noting the project will stimulate economic development across Alberta, provide high-value economic opportunities, lower emissions, and use existing infrastructure to decrease environmental impact.

TC Energy CEO/President François Poirier said, “It is innovative partnerships like this that excite me about our collective energy future. Industry players collaborating to leverage our existing energy infrastructure and expertise to support meaningful emission reductions and reduce our carbon footprint is a great example of how we can secure meaningful new investment opportunities, serve current and future customers and achieve operational excellence while continuing to safely and responsibly deliver the energy people need.”

Canada’s enhanced climate targets include a 45 percent reduction in greenhouse gas emissions below 2005 levels by 2030.

A coalition of leading Canadian oil sands producers also announced they were cooperating to achieve net-zero greenhouse gas emissions from their operations by 2050 as they face challenges in meeting Canada’s energy transition target, after the governments of Canada and Alberta introduced substantial relief packages for emission-reduction projects. Participants include Suncor Energy Inc., Canadian Natural Resources, Cenovus Energy, Imperial Oil Limited, and MEG Energy.

Alberta is a global leader in Carbon Capture, Utilization, and Storage (CCUS) technology, with more than $1.24 billion committed to the emissions reduction technology that is considered cost-effective and environmentally tangible.

Northern Nutrients to Build Sulfur-Enhanced Urea Plant in Saskatchewan

Featured, News, Saskatchewan, Specialty, Sulfur, Urea

Northern Nutrients Ltd., a crop nutrition company based in Saskatoon, Sask., announced on June 24 that it plans to build a manufacturing facility for sulfur-enhanced urea that will utilize Shell Thiogro technology, a patented process that incorporates micronized elemental sulfur into urea.

Construction at a site outside of Saskatoon will begin in July 2021, with expected completion in early 2022. Ross Guenther, President and Co-owner of Northern Nutrients, said the plant will have a production capacity of 56,000 mt/y, with 7,000 mt of onsite storage. Northern Nutrients is licensing the Shell Thiogro technology, and has been importing patented Shell sulfur urea into North America for three years.

“The adoption of the products by producers and the anticipated increasing demand has convinced us to produce our own form of the sulfur-enhanced urea in Canada,” Guenther said, noting that usage of the product among Northern Nutrients’ customers in North America has increased 15-fold since the first commercial season in the spring of 2019.

“We first tried the sulfur product three years ago, and all our growers who have tried it have increased their acres and moved all of their sulfur requirements over to the Shell micronized sulfur urea product,” said Northern Nutrients Co-owner Matt Owens. “They like the product (11-0-0-75) because it is readily available to the plant early and throughout the growing season, it mixes well in any dry blend, and it has a low salt index compared to other forms of sulfur.”

Rob Owens, another co-owner of Northern Nutriens, who also serves as President and General Manager of Emerge Ag Solutions, an independent crop input retail business in Eston, Sask., said the lower salt index in the product is a good fit for Western Canada. He added that the product is much less dusty than ammonium sulfate, and can be applied safely in the seed row, resulting in time savings for growers.

“Once we saw how our customers responded to it, we thought we’d like to invest in the company, so we are very optimistic about what the sulfur product and the new phosphorus product could mean for farmers,” he said. “We are very excited to bring these products to dealers and farmers in the West.”

Northern Nutrients was founded in the Netherlands in 2016 as a distributor of low salt and sustainable fertilizers. The Canada-based company Northern Nutrients Ltd. began operations in 2018 as the North American marketing and distribution partner for Korean sulfur-based fertilizer producer H Sulphur’s Super S (11-0-0-75) sulfur and urea fertilizer product (GM June 29, 2018).

Houston-based Shell launched its UreaPlusS sulfur-enhanced urea in 2015 (GM May 18, 2015), following the earlier release of its Thiogro phosphates technologies, which enables producers to incorporate micron-sized particles of elemental sulfur and other nutrients into products such as MAP, DAP, TSP, and NPKs.

Yara International ASA – Management Brief

Management Briefs, Scandinavia

Yara International ASA, Oslo, on June 23 announced new appointments to its Group Executive Board effective July 1, 2021, aimed at strengthening the company’s transformation focus and portfolio development.

Lars Røsæg has been appointed EVP Corporate Development & Deputy CEO. He has served as EVP & CFO since November 2018. In this new role, Røsæg will be responsible for overseeing operations and capital allocation across the company, as well as Yara’s Strategy, M&A, Portfolio Development, Corporate Communications, and Corporate Affairs functions.

Thor Giæver has been appointed EVP & CFO. He has served as SVP Investor Relations since 2011, and has previously held the positions of Acting CFO (2014-2015) and Head of Controlling & Risk Management (2009-2011), having joined the company in 2004. Giæver will be responsible for Corporate Finance, Market Intelligence, Investor Relations, Accounting, Funding, Treasury, Insurance, and Sustainability Governance functions.

“These changes to our Group Executive Board will strengthen our transformation focus, in line with our corporate strategy and capital allocation policy,” said Yara President and CEO Svein Tore Holsether.

Mónica Andrés has been appointed EVP Europe. Andrés is currently VP Farming Solutions Europe and a member of the Yara Europe regional leadership team with the overall responsibility for shaping Yara Europe’s strategic agenda, and has previously held several leading commercial and operational positions in the company, including SVP Business Unit Asia and Commercial Director Mediterranean.

Solveig Hellebust has been appointed EVP People, Process and Digitalization. Hellebust has served as Yara’s Chief HR Officer since December 2020, before which she was Group EVP People & Operations in DNB. She has previously held senior roles in Pronova BioPharma and Telenor. Hellebust will have overall responsibility for Yara’s people and competence development, and for the data architecture and infrastructure to enable the digitalization of Yara’s core processes and operations.

CNH Industrial to Acquire Raven Industries, Expand Precision Ag Portfolio

London, News, News Briefs

London-based CNH Industrial N.V. on June 21 announced that it has entered into an agreement to acquire 100 percent of the capital stock of precision ag company Raven Industries Inc. for $58 per share, representing a $2.1 billion enterprise value and a 33.6 percent premium to the Raven Industries four-week volume-weighted average stock price.

CNH said the acquisition builds upon a long partnership between the two companies, and will enhance its position in the global agriculture equipment market by adding innovation capabilities in autonomous and precision agriculture technology. CNH said the transaction will be funded with available cash on hand.

Closing is expected to occur in the fourth quarter of 2021, subject to the satisfaction of customary closing conditions, including approval of Raven shareholders and receipt of regulatory approvals. Raven is headquartered in Sioux Falls, S.D.

“Precision agriculture and autonomy are critical components of our strategy to help our agricultural customers reach the next level of productivity and to unlock the true potential of their operations,” said Scott Wine, CEO of CNH. “Raven has been a pioneer in precision agriculture for decades, and their deep product experience, customer driven software expertise, and engineering acumen offer a significant boost to our capabilities.”

“Our board and management are excited about this partnership and what it means for our future,” said Dan Rykhus, President and CEO of Raven. “We look forward to CNH Industrial leveraging the Raven talent and culture, as well as the Sioux Falls community, as part of their vision and future success.”

Raven is a global technology partner for key strategic OEMs, agriculture retailers, and dealers. The company is organized into three business divisions: Applied Technology (precision agriculture), Engineered Films (high-performance specialty films), and Aerostar (aerospace). The company posted consolidated net sales of $348.4 million for the twelve months ended Jan. 31, 2021.

CNH said it plans to undertake a strategic review of each business to best position them for future success and maximize shareholder value. The transaction is expected to generate approximately $400 million of run-rate revenue synergies by calendar year 2025, resulting in $150 million of incremental EBITDA.

Raven joins a stable of ag companies in CNH’s portfolio, including Case IH, New Holland Agriculture, and Steyr. CNH also owns Case and New Holland Construction for earth moving equipment; Iveco for commercial vehicles; Iveco Bus and Heuliez Bus for buses and coaches; Iveco Astra for quarry and construction vehicles; Magirus for firefighting vehicles; Iveco Defense Vehicles for defense and civil protection; and FPT Industrial for engines and transmissions.

Australian Minister Rejects Green Project

Ammonia, Hydrogen, News, News Briefs

Australia Environment Minister Sussan Ley has rejected The Asian Renewable Energy Hub’s (AREH) planned 26-gigawatts of wind and solar generation project, which would produce hydrogen and ammonia, saying it would disrupt tidal movements and impact the habitat and lifecycle of native species, according to a Bloomberg report.

The federal government granted the A$36 billion project “Major Project Status” last October (GM Oct. 30, 2020). It was initially expected to go through a fast approval process toward its target of first exports by 2028, as it would bolster the nation’s ambitions to become a world-leading exporter of hydrogen.

However, new environmental approvals were required after the project developers expanded the original plan and decided to produce green hydrogen and ammonia for export. In addition to adding infrastructure for the production and export of green hydrogen and ammonia, the revised project plan also called for developing ammonia pipelines and a port facility to handle ammonia exports, as well as desalination and energy storage facilities.

The updated proposal increased the capacity of solar generation, and incorporated plans to build a new township between Broome and Port Hedland to house workers.

The project scope envisages producing about 1.8 million mt/y of hydrogen via electrolysis, and up to 10 million mt/y of green ammonia. Exports would be targeted at Japanese and South Korean utilities’ companies.

The consortium said it plans to continue with the project and is now working to amend its plans so the hub can go ahead. It said it is working to understand the minister’s concerns as it continues work on the detailed and engineering aspects of the project.

Critics of Ley’s decision said the government is not as concerned when it is a coal or petroleum project. “The same government approved the Carmichael coal mine” despite opposition from activists who feared local ecosystem destruction, said BloombergNEF Australia Analyst Will Edmonds, referring to a controversial new mine approved in 2019. The central government is also going ahead with nominations for future offshore petroleum exploration sites, he added.

AREH is being developed by a consortium of InterContinental Energy (ICE), CWP Energy Asia, Vestas, and Macquarie. A Final Investment Decision is expected in 2025, with construction beginning the year after.

Fertilizer Maker Fined $25,500

News, News Briefs, Pacific N.W.

The Washington Department of Ecology, Spokane, reported on June 21 that it has fined Pacific Northwest Solutions, a Pasco fertilizer manufacturer, $25,500 for operating a mobile fertilizer reactor without an air quality permit. The penalty is the third in the past two years for the company, which was previously fined $5,000 in 2019 and again in 2020, both times for failing to properly test their equipment to ensure it met air quality emissions standards.

The $25,500 penalty was issued after an Ecology inspector found a Pacific Northwest Solutions’s mobile fertilizer reactor operating without a permit on March 8, 2021, at a site near Moses Lake. An investigation found that the reactor produced a total of 650 tons of ammonium polyphosphate liquid fertilizer over three days.

Pacific Northwest Solutions can appeal the penalty within 30 days.

Investment to Boost Tracegrow Output

News, News Briefs, Scandinavia, Specialty

Taaleri Investments Ltd., Helsinki, said on June 22 it has invested €1.5 million in Tracegrow Oy, Kärsämäki, Finland, which produces organically certified fertilizer from used batteries. Tracegrow intends to use the proceeds from the private placement to build a second production line at its Kärsämäki facility. The new line will expand both the company’s production capacity and product portfolio. The involvement of Taaleri will also support the company’s goal of internationalization.

Tracegrow reports that it already sells its products worldwide in 15 countries and commercial scale production has been running since 2019. Brazil’s AMD Agro began distribution of company products in 2020.

Tracegrow has established a process to convert black mass from alkaline batteries into a sustainably produced fertilizer solution with high CO2 reduction potential. The company said up to 90 percent of the trace elements in alkaline batteries can be reused. The end result, ZM-Grow™, is approved for organic farming in the E.U., U.K., and Australia. Current products supply zinc, manganese, and copper.

Taaleri is a Nordic investment and asset manager with an emphasis on renewable energy and other alternative investments.

Black & Veatch Completes Koch FEED

News, News Briefs, Nitrogen, UAN, Western Cornbelt

Global engineering, procurement, consulting, and construction company Black & Veatch, Overland Park, Kan., reported on June 21 that it has completed the key front-end engineering design (FEED) work and cost guidance for Koch Fertilizer’s $90 million upgrade to its Beatrice, Neb., nitrogen plant (GM Nov. 13, 2020).

Koch plans to expand UAN capacity 75,000 st/y at the site. Black & Veatch said the plant improvements are to be completed this fall and build on other recent enhancements, including increasing ammonia loading capacity.

The Beatrice plant received Energy Star certification from the U.S. EPA in 2019 and 2002, signifying that the site performs in the top 25 percent of similar fertilizer manufacturing facilities nationwide for energy efficiency and meets EPA energy efficiency performance levels.

Iowa Supreme Court Rules Against Water Regs

Featured, News, Western Cornbelt

The Iowa Supreme Court on June 18 by a 4-3 vote dismissed a case alleging Iowa regulators violated state law by failing to protect the Raccoon River, a drinking source for about 500,000 Iowans in the greater Des Moines area, according to Bloomberg Law.

The plaintiffs, Iowa Citizens for Community Improvement and Food & Water Watch, failed to establish they suffered a concrete injury that a favorable ruling was likely to redress, and therefore lacked standing to bring the case, according to the majority, which said the lawsuit sought “broad abstract declarations” and sought to “repurpose” the state’s public trust doctrine to solve a complex environmental problem.

“There is not enough here to demonstrate that a favorable outcome in this case is likely to redress the plaintiffs’ alleged reduced ability to kayak, swim, or enjoy views of the Raccoon River, or would save them money on drinking water,” wrote Justice Edward Mansfield.

The high court reversed a lower court’s ruling and remanded the case with instructions to dismiss the petition.

Justice Christopher McDonald, in a dissent, said the plaintiffs’ assertion that the state failed to regulate agricultural nitrogen and phosphorus entering the Raccoon River and substantially impairs the waterway “certainly satisfies” their standing in the case. “The plaintiffs do not need to show that the requested relief will solve the problem completely, but only that it will do some good,” he said.

The plaintiffs sued the state’s Department of Natural Resources and others in March 2019 (GM March 29, 2019) for allegedly failing to protect the public’s use of the Raccoon River. They claimed that Iowa’s agricultural production causes runoff that pollutes Iowa’s water bodies, including the Raccoon River. The Iowa Department of Natural Resources has classified parts of the Raccoon River as impaired for nitrate because they fail to meet federal Class C drinking water standards.

The plaintiffs asked for declaratory relief, an order requiring the state to adopt a remedial plan with mandatory agriculture water pollution controls, and an order prohibiting expansion of animal feeding operations in the river’s watershed.

Their case relies on the public trust doctrine, which is based on the notion that the state is a steward of Iowa’s natural resources and should protect the public’s right of access to public water, which is both in the common law and the Iowa Constitution.

The plaintiffs said they are considering their legal options. “Iowans have a right to clean water – guaranteed by our constitution under the public trust doctrine, and the state has a duty to protect that right,” said Adam Mason, State Policy Organizing Director for Iowa Citizens for Community Improvement.

In 2015, the Des Moines Water Works (DMWW), the largest water utility in Iowa, which has one of the most expensive nitrate removal systems in the world, sued three drainage districts over high levels of nitrogen going into the river. The Iowa Supreme Court ruled against DMWW and the case went to federal court, where a judge dismissed it saying that the pollution was an issue for the legislature to address (GM April 14, 2017).