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Yara to add Savannah and Mississippi River facilities
Yara North America Inc., Tampa, this past week announced two major new initiatives that should significantly enhance its logistics in the U.S. market. They include a new terminal near Savannah, Ga., and a new warehouse on the Mississippi River, 60 miles north of New Orleans.
Yara says it plans to build a new liquid terminal that will forge a strategic hub for logistical operations in the southeastern U.S. The land lease – signed with Seagate Handling, Inc., a subsidiary of Dulany Industries ?Çô clears the way for a state-of-the-art liquid bulk terminal to be located near Savannah, Ga., at roughly the midpoint between current Yara facilities in Baltimore and Tampa.
“Not only will the Savannah terminal act as a centralized link between existing East Coast operations, the storage capacity is an efficient fit with our European production system – providing value growth in step with global Yara,” says Steve Rodgers, Yara North America’s vice president of supply and logistics.
The lease gives Yara the ability to build a liquid bulk terminal consisting of four above-ground steel tanks: two 10,000 st for CN-9 and CN-8, one of 15,000 st for UAN-32, and one 4,000 st for sulfur. The project effectively carves out a long-term supply position on the eastern seaboard.
Once in full operation, the annual throughput of the new terminal is estimated to be 65,000 st. Product load-out will be both to railcar and truck. The state-of-the-art facility will be able load four trucks at a time, 24 hours a day.
“The Savannah terminal will create an efficient logistical hub of service for both the agricultural and industrial market segments in the southeastern USA ?Çô including Georgia, North and South Carolina, Florida, Virginia, and Tennessee,” says John Oster, Yara North America’s facilities director.
Groundbreaking is scheduled for July 2008, and the new terminal is expected to be fully operational in July 2009.
Yara said July 9 that it has signed a long-term lease for 50 acres of land in St. James Parish, up the Mississippi River approximately 60 miles from New Orleans. Yara will build and operate a 55,000 mt, state-of-the-art import fertilizer warehouse capable of handling panamax-size vessels. The deal was signed with St. James Stevedoring. Groundbreaking will start as soon as all permits are finalized, with a completion estimated for first quarter 2010.
The terminal will provide direct access to imported fertilizer for local markets and increased access for rail-served agricultural markets in the Midwest and eastern half of the U.S., including growing industrial segments. Key products will be granular and prilled urea, with expansion into bulk P and K product lines at a later stage.
“Yara North America is a leading importer of urea and New Orleans is the primary import geography for fertilizers in North America. The establishment of this terminal will provide our customers with increased access to imported fertilizer,” said Pete Valesares, Yara North America president. “The fertilizer industry needs an infrastructure to support the rapid increase of imports in North America, which is becoming more and more dependent on imported fertilizer to satisfy a growing demand. Yara is catering to this need and showing its long-term commitment to the North American market,” he added.
Stueve Construction Co., which is experienced in the construction of fertilizer storage facilities, will build the terminal. St. James Stevedoring will provide stevedoring services at the facility.
Yara did not disclose the projected cost for the new facilities.
New Koch UAN could hit market in August
A new supply of nitrogen solutions distributed by Koch Nitrogen Co. could hit the market in August. Dyno Nobel, the manufacturer of the product, is this month revving up its new 290,000 st/y of UAN capacity at its Cheyenne, Wyo., nitrogen complex. Expectations were that the product would be available in the third quarter; that now appears to be sooner than later. Dyno and Koch announced late April (GM April 28, p. 10) that Koch will take 100 percent of the product under a tolling agreement.
Koch Nitrogen President Steve Packebush noted in April that the deal opens up a new region for the company, allowing it to better serve new and existing customers. Under the agreement, Koch will be providing anhydrous ammonia to supply the new upgrade. The older AN facility will continue to be supplied by an existing Dyno Nobel ammonia plant.
The Dyno Nobel/Koch tolling agreement is for two years, renewable for one, according to sources.
As for Dyno Nobel, with good demand from the fertilizer sector, the company is opting to put plans for additional ammonium nitrate production on hold at Cheyenne. However, not all of the recent upgrade will go into UAN. The upgrade adds 200,000 st of AN capacity to Cheyenne, bringing total production at the site to 500,000 st. Of the new AN capacity, three-fourths is expected to go to UAN, with the rest going to AN for the explosives market.
Last summer there were company concerns that the cost of the Cheyenne upgrade would go from $50 million to $80 million (GM Aug. 27, 2007, p. 1). However, now with some extra AN development on hold due to the Koch deal, the number is less clear. The company declines to give a further update at this time. Since the upgrade was on an existing MTBE site, sources say savings were gained since some infrastructure was already in place.
Alaska expects new pipeline to spur Cook Inlet exploration
The State of Alaska has been exploring some four natural gasline options, as detailed in Green Markets last week (GM July 7, p. 14). However, Governor Sarah Palin’s announcement July 7 about a new public/private gasline venture for an in-state gasline was a surprise, according to Agrium Inc. spokesperson Lisa Parker.
Rather than bringing gas into Agrium’s idled Kenai nitrogen plant, the Palin proposal would take gas from the region to customers in the interior and southcentral part of the state. Parker said Agrium has been willing to pay a good price for Cook Inlet gas, but producers have said gas supplies were depleted and there were no new discoveries to keep the Agrium plant in operation.
Now, the newly proposed gasline envisages new discoveries in Cook Inlet. Conceivably, if new discoveries are indeed forthcoming, some of that could stay in Cook Inlet for Agrium.
Why are discoveries more likely with a pipeline and not before? The state says that Cook Inlet gas is stranded similar to that in the state’s North Slope. It says this significant resource potential is stifled by the relatively small potential for market expansion. This gasline will link the Cook Inlet gas to an expanding market and will create incentives for explorers to invest in finding more gas in Cook Inlet.
Construction of the gasline would start in the south and progress north. The first phase would leave Cook Inlet and reach Fairbanks and Interior Alaska by 2013. Over the next five years, the state hopes to see discoveries in both Cook Inlet and along the in-state pipeline corridor. If not, the project’s second phase could continue building the line north to access gas supplies in the North Slope or beyond, making them available to interior and southcentral Alaska by 2014. If phase two is not needed, the in-state line could be connected to the main North Slope line when it is completed around 2018-2020.
Therefore, if significant gas is not found in Cook Inlet, phase two could bring gas down from the North Slope. Parker held out the possibility the new pipeline could wind up being a north-south pipeline, eventually piping gas back down to the Cook Inlet.
The state said the goal is to roll out the recommended structure and more details this fall, then seek any necessary enabling legislation and/or appropriations during the next legislative session in January 2009.
The public/private partnership to build the gasline includes the Alaska Natural Gas Development Authority (ANGDA), ENSTAR Natural Gas Co., and the State of Alaska.
Fire damage to Penn. fert plant in millions
Saxonburg, Penn.-Fire destroyed Excell Minerals’ plant in Saxonburg, Penn., causing losses in the millions and shutting down production – at least for the time being – of the company’s custom-blend golf course Excellerator brand. About 100 firefighters from 20 nearby volunteer companies responded after the flames broke out the afternoon of July 5, sending a thick cloud of smoke billowing into the air. Their efforts were hampered by the afternoon heat and the lack of water. Two firefighters reportedly suffered minor heat exhaustion but didn’t have to be taken to a hospital. There were no injuries inside because the plant was vacated for the week, but damage is being estimated at $3.5 million. Theresa Winell, company customer services department, said the fire was “quite a loss,” which was the only word from the company last week. Excell’s parent, Harsco Corp. in Pittsburgh, referred questions to Excell officials, who had not returned calls at press time. Local fire department officials indicated that further investigation was needed to determine the cause of the fire. Excell describes Excellerator as a custom blended, prilled, calcium silicate product that contains high levels of calcium, magnesium, and other micronutrients. It says it contains the highest levels (39 percent) of soluble silicon known in the industry. Excell has a network of distributors that stretches from coast to coast and internationally. One of the distributors who was contacted didn’t know about the fire, but said he had received his last shipment of Excellerator only a few days ago. “I guess we just lucked out in that respect,” he remarked.
Feds levy heavy fine on Fla. NH3 pipeline leak
Tampa, Florida-A federal agency has levied a fine of nearly $400,000 against Tampa Pipeline, the owner of a 30-mile-long anhydrous ammonia pipeline feeding phosphate plants in Bone Valley, for a leak caused by a 16-year-old boy in November. The company said it will protest the fine, according to various local media reports, and sought an exemption until Aug. 1 to file. The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration cited a dozen violations totaling $398,000 in penalties, the worst of which included insufficient trained personnel to deal with the leak, and that the company failed to coordinate with emergency officials. The youth, who drilled a hole in the pipe in search of money he thought was hidden by a robber, was charged in the case, but details were not released due to his age.
CHS ag business income up 133 percent
St. Paul, Minn.-CHS Inc.’s ag business segment saw a 133 percent increase in income before taxes for the third quarter ending May 31. Earnings were $179.9 million on sales of $6 billion, up from the year-ago $77.1 million and $2.4 billion. The unit includes crop nutrients, grain marketing, and local retail operations. Crop nutrients generated $54.9 million of the earnings, according to CHS. Nine-month ag business income was $504.6 million on sales of $14.1 billion, up from the year-ago $108 million and $6.1 billion, respectively. CHS said the record performance by its ag business was driven by high global and domestic demand for fertilizer and grain. By contrast, the CHS energy segment saw a significant decline, with third-quarter income dropping to $12.5 million from the year-ago $178 million. Nine-month energy income was $165.7 million, down from $338.7 million. As a result, CHS third-quarter net income was off, at $188.7 million on sales of $9.3 billion from the year-ago $239.6 million and $4.7 billion, respectively. Nine-month net income was $657.6 million on sales of $22.8 billion, compared to the year-ago $459.6 million and $12.2 billion, respectively.
BHP completes Anglo Potash acquisition
Melbourne-BHP Billiton said July 10 that it has completed the previously announced acquisition of all the issued and outstanding common shares of Anglo Potash Ltd. for C$8.15 per share in cash. The total price tag was put at C$284 million (GM May 19, p. 1). The acquisition provides BHP with 100 percent control of the Canadian potash joint venture development project, established between BHP Billiton and Anglo Potash in June 2006. BHP also announced that an application to delist Anglo Potash’s common shares has been filed with the TSX Venture Exchange, and that the delisting is expected to be effective within three trading days. BHP executives have been quoted as saying BHP may be willing to invest up to $10 billion over the next decades to become a major potash producer.
DSM NH3 woes may last into fall, cost E30 M
Heerlen, The Netherlands-DSM Agro, a unit of Royal DSM NV, reports that problems at one of its ammonia plants in the Netherlands that began in June may take into October to repair. The production interruption was originally estimated to last only a few weeks. DSM said the incident was unexpected, but once repairs are complete the plant will be back at full production. While the damage to assets is limited, the business loss for DSM Agro, for which ammonia is the primary raw material, could run into several tens of millions. However, the company said that due to insurance, the one-time impact to the company is expected to be between E25-30 million, most of which will occur in the third quarter. DSM said considering the current positive business climate for both DSM and DSM Agro, this interruption in production is no reason for DSM to lower the outlook it has given for the full year.
K+S to reorganize nitrogen business
Kassel, Germany-The K+S Aktiengesellschaft board of directors has decided to reorganize the COMPO and fertiva business segments. K+S says the objective is to position the Group in the attractive fertilizers sector even more strongly and to open up new growth opportunities. The reorganization essentially aims to group within one company the nitrogen fertilizers sold by fertiva with the ENTEC and sulfur-containing NITROPHOSKA products previously sold by COMPO, starting from Jan. 1, 2009. K+S hopes it will achieve a sales structure with a stronger concentration on bulk customers in agriculture and special crops such as fruits, vegetables, and grapes. Slow-release fertilizers, coated fertilizers, and NPK specialities, as well as nutrient salts in the professional area, will be managed, together with consumer products, under the COMPO umbrella and its units in Germany and abroad.