All posts by webster@kennedyinfo.com
Second death at Mississippi Phosphate Corp. in two weeks
Mississippi Phosphate Corp. has confirmed that one individual was killed Friday, June 1, due to an explosion at the company’s Pascagoula, Miss., fertilizer complex. The victim was identified as 20-year old Jeremy Moore. Another two employees were injured.
On May 21, a 39-year old was killed due to head trauma when there was a machinery explosion at the facility (Green Markets May 28, 2012). The local sheriff told Green Markets that Jeffrey Simpson, died due to shrapnel when a machine blew up.
Miss Phos is owned by Phosphate Holdings Inc.
Mississippi Phosphates complex still offline
The Mississippi Phosphates Corp. production facilities at Pascagoula, Miss., continue to be offline today after going down Friday, June 1, due to an explosion that killed one employee and injured two others. The company said the incident was contained within the plant. Miss Phos continues to work with OSHA officials and may have news later in the day as to when production can resume. Miss Phos said the facility is safe and secure, and employees continue to report to work as usual. Terminaling activity continues at the facility.
Miss Phos is owned by Phosphate Holdings Inc.
CF reports power outage
CF Industries Holdings Inc.’s large nitrogen complex at Donaldsonville, La., suffered a power outage Thursday afternoon, May 31. However, the company confirmed that power was quickly restored that evening. CF said no injuries were reported at the complex and only minor damage was incurred. Shipping and loading resumed Friday morning, June 1, and CF was in the process of conducting an orderly startup of all plants.
PhosChem reaches agreement with Indian customers
Phosphate Chemicals Export Association, Inc. (PhosChem) reached agreement to supply 500,000 to 700,000 mt of DAP to two large Indian customers for shipments through February 2013. This transaction is part of an existing three-year supply agreement between the parties. The price is $580/mt CFR India.
"This agreement demonstrates our commitment to helping meet the need for phosphate fertilizers in India. We are pleased to reach this agreement and look forward to continuing to serve our Indian customers in the years ahead," said Gordon McKenzie, president of PhosChem.
Gavilon finds a buyer
Japan’s Marubeni Corp. will buy Gavilon Group LLC for $3.6 billion. Marubeni had been pegged as the finalist for Gavilon. Cairo-based Orascom Construction Industries, which owns a stake in Gavilon, also confirmed the deal. For more details see the Green Markets Web-Edition June. 1.
Yara partners with Orica and Apache for Australian TAN plant
Yara International ASA reported on May 21 that it has reached an agreement with Orica Limited and Apache Corp. to form joint ventures to build a 330,000 mt/y technical grade ammonium nitrate (TAN) plant on the Burrup peninsula in Western Australia, and to distribute ammonium nitrate and other explosives products to mining customers in the Pilbara region of Australia.
“This is an important and value creating project for Yara that confirms our dedication and ambition to be among the leading suppliers of TAN globally,” said Jørgen Ole Haslestad, president and CEO of Yara. “Together with our partners, we look forward to servicing the fast growing Pilbara iron ore market.”
The joint venture will be owned 45 percent by Yara, 45 percent by Orica, and 10 percent by Apache. Construction of the plant is expected to have a capital cost of approximately US$800 million excluding capitalized interest, and will be completed by the end of 2015. Tecnicas Reunidas will be appointed as the engineering, procurement, and construction contractor under a fixed price, turnkey contract. Yara will manage construction and ongoing operation of the plant.
The parties have also agreed to form a distribution and marketing joint venture to distribute all TAN and associated products and services to mining customers in the Pilbara region. This joint venture will be owned in the same proportions as the TAN plant joint venture, but will be managed by Orica.
“This is an extremely important project for Orica,” said Ian Smith, Orica’s managing director and CEO. “Together with our partners, we have a clear vision for servicing the fast growing Pilbara iron ore market, which is being strongly embraced by our customers in the region.”
Upon commencement of construction, Orica will pay approximately US$110 million for the 45 percent stake, to be split between Yara and Apache.
“This announcement is especially significant because it is essentially a manufacturing project based on the natural gas resource,” said Western Australian Premier Colin Barnett. “As well as creating at peak 600 construction jobs and 60 operational positions when it is commissioned in 2014, the Burrup nitrate plant will generate significant additional local business opportunities and employment over its expected 40-year life span.”
Earlier this month, Yara told analysts that it is considering significant TAN and DEF (diesel exhaust fluid) capacity at a new Belle Plaine, Sask., nitrogen plant (GM May 21, p. 11). Yara hopes to make a decision on its Belle Plaine expansion this summer. Yara told Green Markets back in February that the new world-class expansion could mean an additional 1.3 million mt/y of urea and 800,000 mt/y of ammonia (GM Feb. 13, p. 1).
Dyno Nobel’s proposed NH3 plant to be located at Cornerstone Chem complex in Louisiana
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 Fortier Manufacturing Complex on the west bank of the Mississippi River in Jefferson Parish, 15 miles upriver from New Orleans.
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, p. 1).
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. The company’s website reports annual production of 2.5 billion pounds. 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."
According to Louisiana Economic Development (LED), the proposed project would create 50 new permanent jobs for Cornerstone Chemical, while Dyno Nobel would create another 10 new permanent jobs at the site. The 60 new direct jobs would result in 440 new indirect jobs, LED reported. Salaries for the new direct jobs would average nearly $58,000 per year, plus benefits, and the project would retain 441 existing Cornerstone jobs.
"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."
LED’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.
"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
CP Rail strike halts freight shipments; Canadian fert industry calls for quick resolution
The Teamsters Canada Rail Conference, a union representing 4,800 engineers, conductors, and rail traffic controllers, went on strike shortly after midnight May 22 after negotiations with Canadian Pacific Railway (CP) failed to produce a new labor deal. CP and the union, which has been without a contract since the end of December, are at odds over employee pension benefits.
The strike halts CP’s freight services across Canada, although commuter-train services in Vancouver, Toronto, and Montreal will remain in operation after CP and the union agreed ahead of the strike deadline to allow those services to continue.
“As reported, the union has withdrawn its services and, as a result, CP has successfully executed the safe and structured shutdown of its freight train operations in Canada,” said CP Spokesman Ed Greenberg in a May 23 statement. “In addition to customer and supply chain impacts, the suspension of CP’s freight service will also impact many of the connecting railways with whom we do business.”
The strike prompted demands for a quick resolution from the fertilizer, mining, and grain industries, all of whom predicted economic woes if the labor dispute continues. The Canadian Fertilizer Institute (CFI) on May 21 issued a statement urging the Canadian government to act quickly to enact back-to-work legislation, saying ending the strike “is critical to sustaining Canada’s domestic and export markets.”
“Rail service disruptions are damaging to the Canadian economy in general and the Canadian export industry in particular,” said Roger Larson, CFI president. “Even the threat of a strike has serious repercussions on the Canadian economy and on the reputation of our exporters in foreign markets as buyers move to other sources of supply.”
CFI said the Canadian fertilizer industry faces an annual logistical challenge of moving 25 million mt of product, and member companies are currently facing the combination of tight inventories and strong global demand for all fertilizer products.
“The domestic, U.S., and offshore demand for Canadian fertilizer has been very high this spring, and this trend is expected to continue,” CFI said. “Our members currently have large unit trains of potash scheduled to move from western Canada to Vancouver for export offshore, as well as various fertilizer products scheduled to move domestically and cross-border to the important U.S. market. CFI members simply cannot afford the repercussions of a rail disruption.”
Potash shipments for Canpotex, the export marketing arm for Canadian producers PotashCorp of Saskatchewan Inc., Agrium Inc., and The Mosaic Company, are handled by CP and its larger rival, Canadian National Railway (CN). “CP certainly is an important partner of the potash industries,” said Bill Johnson, senior director of public affairs at PotashCorp. Johnson said the industry has “an interest in seeing this dispute resolved quite quickly.”
“The perception of Canpotex from the customer side of things is a reliable supplier,” added Agrium Spokesman Richard Downey.”That’s one of the key benefits of Canpotex, and anything that damages that is of major concern for all of us.”
In a statement on May 23, Canadian Labor Minister Lisa Raitt said the government is “concerned about the national economic significance this will have, and we are prepared to act in the interest of the national economy.” Raitt said she is prepared to introduce back-to-work legislation as early as May 28 if no deal between CP and the union has been reached.
Larson added that “once this issue is resolved, the government must look at long-term action to prevent labor disputes in services that are essential to the long-term economic health of our country
Sulfur
Tampa: Supply and demand for sulfur continued to be in balance last week, as U.S. refineries were cranking out product at steady levels. The amount of sulfur would be higher if refiners were using higher sulfur crude – which they were not.
The U.S. Department of Energy said last week that the weekly operating capacity rate for refineries decreased 0.2 percent, from 88.3 percent to 88.1 percent, but that remained a very high rate.
Vancouver: Spot prices were in the $180-$190/mt FOB range last week.
Meanwhile, the strike (see front page story) at Canadian Pacific Railway (CP), which started shortly after midnight on May 22, will primarily affect Shell and its shipments from its oil sands production area, depending on how long the walkout lasts. Vancouver is primarily served by the Canadian National (CN) Railway, while Shell Shantz is served by CP.
One problem from the strike would be if sulfur railcars back up at yards, which could take more time to unclog.
West Coast: A sulfur-prill vessel was scheduled to be loaded at Anacortes, Wash., early this week.