Yanbu, Saudi Arabia — Saudi Aramco and China Petrochemical Corp. (Sinopec) have agreed to the formation of a joint venture related to the ongoing development of Yanbu Aramco Sinopec Refining Co. (YASREF) Ltd., formerly the Red Sea Refining Co. Sinopec will hold equity interest of 37.5 percent in YASREF, with Saudi Aramco holding the remaining 62.5 percent. Sinopec, the biggest Asian-owned refiner operating in Asia, is also Saudi Aramco’s largest crude oil buyer. The YASREF project involves construction of a new “grassroots” refinery on the Yanbu site covering over 5.2 million square meters. With construction well underway, the project is on schedule with 10 percent of construction completed. The YASREF refinery is scheduled to be operational in the second half of 2014. The refinery will process 400,000 barrels per day (bpd) of Arabian heavy crude oil and will produce high-quality transportation fuels. The refinery is set to have the capacity to produce 90,000 bpd of gasoline and 263,000 bpd of ultra-low-sulfur diesel, along with by-products consisting of 6,200 mt/d of petroleum coke and 1,200 mt/d of sulfur.
All posts by webster@kennedyinfo.com
Vale now holds all of Vale Fertilizantes
Rio de Janeiro — Vale S.A. said Jan. 24 that it has now acquired the remaining 5,314,386 free floating common and preferred shares, representing 0.94 percent of the total shares of Vale Fertilizantes. As a result, Vale will hold, through wholly-owned subsidiaries, 100 percent of the common shares and 100 percent of the preferred shares of Vale Fertilizantes.
Record rain adds to manure problem in Ohio
Columbus, Ohio — State streams and waterways are at risk for pollution in Ohio as farmers continue to spread manure over the state’s snow-covered fields, state officials are warning. “At this time, the primary focus has been on the issues at Grand Lake and Lake Erie, but realistically agricultural nutrient runoff has the potential to affect any watershed in the state which runs through land that is in agricultural production,” said Erica Pitchford, public information officer for Ohio’s livestock environmental permitting program. State officials are saying that as many as 40 million chickens, hogs, and cows produce more than 17 million tons of manure each year. With so much manure on hand, officials are worried that farmers will soon run out of storage space, and as a result will spread some of the manure over frozen fields. Phosphorus from the manure washes off the farms and into the waterways, growing blooms of toxic algae along the way. The algae blooms pose a problem not only to health, but also to the state’s billions of dollars in tourism and fishing industries. The weather conditions haven’t helped much either, as record rainfall continues to spread manure over the fields and into the waterways. Pitchford told Green Markets that that the wet year and record rainfalls pushed back harvesting. “It’s fortunate that the ground hasn’t frozen for a couple of days; it’s also been dry for two weeks, allowing farmers to get back to where they need to be,” according to Pitchford. State officials are also doing their best to help regulate the problem. “If storage maxes out, and farmers are cautioned not to apply on frozen land, we also want the farmers to reach out to soil and water conservation district for help,” said Pitchford. As an added precaution, farm owners must also get emergency approval from the Ohio Department of Agriculture before they can spread manure on frozen ground. Ohio State University Extension officials are also urging farmers to follow voluntary precautions intended to prevent winter spills, including keeping manure at least 200 feet away from stream banks, and spreading it on no more than 20 acres of frozen ground at a time.
Smells from Synagro biosolids upset town
Gladstone, Va. — Synagro isn’t making any promises to residents of this tiny community two miles southwest of Richmond, who are complaining about odors from biosolids in railcars parked for unloading – sometime for weeks and months – at the edge of town. Residents of this town of about 24 say that sometimes the smell is so bad they can’t stomach their food, and what’s even more frustrating for them – they claim that placing the cars just a half-mile further away would eliminate the problem. “CSX and Synagro wanted an unloading point and chose a place where the train is stopped, uncoupled, and the cars are pushed down a half mile below Gladstone,” long-time resident Charles Brown told Green Markets. “Actually, some of the cars over the years have become very corroded and its smell trouble for Gladstone.” Synagro admits that operations in Gladstone do at times result in railcars being temporarily located near neighborhoods that reside close to the rail yard. “Recently, higher than normal volumes forced us to position the railcars closer than usual to the community,” reported spokeswoman Lauren Howe. “But they were moved as soon as possible. We work very closely with the Virginia Department of Environmental Quality to ensure our operations comply with environmental regulations and are conducted in a safe and responsible manner.” But that doesn’t satisfy Brown and others in Gladstone. “The whole problem is the railroad needs to tell its people you have got to push it out of town. But they are too lazy to do it,” Brown insisted. “They push it to a sidetrack and uncouple it and leave.” He said townspeople have called EPA, Nelson County, and the governor’s office, and they won’t do anything. “Every time we call somebody you’re referred to somebody else. Basically our hands are tied. They bring those trains into Gladstone with six containers on each railroad car. Might be 20 or 25 cars. Synagro has the unloading station three-quarters of a mile below Gladstone instead of keeping on pushing the cars another half or three quarters of a mile.” Synagro said it has its cars positioned on the section of rail yard that it leases and where it needs to conduct its business.
TFI gives new N study mixed reviews
The Fertilizer Institute (TFI) welcomes – to a point – a new study by 16 U.S. scientists that calls nitrogen both an essential nutrient and a pollutant, cautioning that it doesn’t fairly characterize its use by the nation’s farmers. The study’s lead author, Eric Davidson, a soil ecologist and executive director of the Woods Hole Research Center, explains that "Excess Nitrogen in the U.S. Environment: Trends, Risks, and Solutions," is about how much we do know, not about what we don’t know. “We know about nitrogen cycles, and sources, and we know problems can be addressed in economically viable ways," Davidson commented.
Another author, James Galloway, a bio-geochemist at the University of Virginia, cited gains in reducing nitrogen pollution with the engineering and the regulatory tools, but "on the food side, that’s where it gets interesting. How can you still produce the food the society demands, needs, yet use less nitrogen to produce it?"
The report tabulates strategies to help farmers maximize efficient use of fertilizer rather than just maximize crop yield, including buffer strips and wetlands, manure management, and ideal patterns of fertilizer application. It also considers the cost of implementing them, as well as programs for buffering farmers against losses in bad years.
Responding from information supplied to the press, TFI said it was pleased with the study’s recognition of fertilizer’s critical role in food production. “But we are disappointed with the press release’s characterization of farmers’ over-use of fertilizer. Today’s farmers are using fertilizer with the greatest efficiency in history. In fact, farmers in the United States are using 4 percent fewer nutrients to grow 87 percent more corn than they did in 1980. Further, the fertilizer industry promotes the spread of expertise and technology that makes this efficiency possible here to farmers around the world through its support of the International Plant Nutrition Institute. Additionally, while the statement recognizes use of 3 of the 4R’s of nutrient stewardship (source, rate, and place), it fails to mention the fourth R of timing.” To be effective, TFI said, all 4 “R’s” must be used in concert.
Finally, TFI said the statement mentions nitrogen from transportation as another problematic area, saying said it must be noted that from a fertilizer-centric aspect, urea plays an integral role in pollution abatement systems used in certain classes of diesel fuel vehicles. “We know that the use of this technology will continue to demand increasing amounts of urea as additional classes of vehicles are required to have this technology in place,” TFI concluded.
CN, CP to share Canpotex business; CN, Canpotex eye Prince Rupert terminal
Canadian National Railway Co. (CN) and Canadian Pacific Railway Ltd. (CP) on Jan. 23 both announced 10-year deals, effective July 1, 2012, to serve Canpotex Ltd., the Canadian export potash group. It was particularly a feather in the cap for CN, which had been trying to get its foot in the door at Canpotex (GM Sept. 26, 2011). However, both CP and Canpotex acknowledge that CP will move the majority of the potash.
Potash Corp. of Saskatchewan President and CEO Bill Doyle weighed in on the rail business Jan. 26, praising both railroads. “It’s not that CP hasn’t done a great job for us because they have, it’s just that we’re going to grow so fast that we’re going to need both of them, and I will tell you, and I think most people know, that CN handles our domestic business (PotashCorp) and they just are a wonderful partner for us as well. So we have nothing but good things to say about both railroads, and we just think it’s smart to diversify and it’s going to be done to accommodate our growth.”
CN said its agreement is to transport potash volumes that Canpotex ships to export markets. CN will haul via its southern British Columbia (B.C.) line a portion of what Canpotex exports through CN-served Neptune Terminals in North Vancouver.
CN and Canpotex will also continue work on the feasibility of a potential new potash export gateway terminal in Prince Rupert, B.C., which would be served by CN over its northern B.C. line. In both cases, CN said train design will be highly efficient, utilizing distributed power locomotives pulling 170-car trains.
CN Executive Vice President and Chief Marketing Officer Jean-Jacques Ruest told analysts Jan. 24 that Prince Rupert is attractive because it is a deep water port, deeper than Vancouver, and it is a little closer to the northern part of Asia. As a greenfield project he said you could start with a map where you lay down the terminal the way it should be done and plan for long-term phases, as there are no neighbors. He said it would give Canpotex a long, long time in terms of access to market and future expansion.
“It’s a very compelling proposal if you’re looking at diversity in your supply chain and you have an aggressive growth plan, which is what Canpotex is after,” added CN Chief Operating Officer and Executive Vice President Keith Creel. “So we feel very good about our chances to convince them to stay in Canada and have a supply chain solution that meets their needs.”
“We are very excited to partner with a customer like Canpotex that has such a world-class distribution system,” said Ruest.
“Canpotex is focused on growth, efficiency, and strategic investments,” said Steven Dechka, Canpotex president and CEO. “We are pleased again to be partnering with CN, a company that shares the same values and will help us achieve these objectives.”
CP says it will still be Canpotex’s principal Canadian railway, transporting a large majority of potash shipments to Canpotex’s main terminal in Vancouver, B.C. In addition, in conjunction with Union Pacific, CP will transport all Canpotex potash shipments to Portland, Ore.
To move Canpotex’s potash more efficiently and reliably, CP said it has enhanced the infrastructure of its north main line and western corridor, which handle potash service originating from 10 Saskatchewan mines. It said improvements made under CP’s Multi-Year Plan are reducing average route miles and improving the capacity and responsiveness of the CP network. CP’s infrastructure enhancements are part of its four-year capital investment program, approved by the board of directors in the fall of 2010.
"Selection of CP to move the majority of our product to port is a reflection of the strength of our partnership and CP’s ongoing commitment to effic
CSX phosphate/fert volumes up in 2011
Jacksonville, Fla. — CSX Corp. reported that phosphate and fertilizer volumes were up 3 percent for the year ending Dec. 31, 2011, to 321,000 units (units = railcars, containers, or trailers), from the year-ago 313,000 units. Revenue per unit was also up 3 percent, to $1,526 from $1,486. CSX saw a 3 percent decline in coal shipments – its largest commodity – to 1.53 million units, down from 1.57 million units. CSX attributed the drop in coal to lower natural gas prices, which impacted the domestic market. Overall, volumes were up 1 percent for the year, to 6.47 million units from 6.38 million units. Company-wide, net earnings were up 17 percent, to $1.82 billion ($1.67 per diluted share) on revenues of $11.74 billion, compared to the prior year’s $1.56 billion ($1.35 per share) on revenues of $10.6 billion. Fourth-quarter phosphate/fert volumes were up 3 percent, to 78,000 units from the year-ago 76,000 units. The company said shipments of phosphate rock grew as suppliers were stocking up in anticipation of a strong spring season. However, revenue per unit declined, mostly due to product mix. Revenue per unit was down 10 percent, to $1,500 from $1,658. Company-wide, fourth-quarter net earnings were up 6 percent, to $457 million ($.43 per share) on revenues of $2.95 billion, from the year-ago $430 million ($.38 per share) on revenues of $2.82 billion.
The Week in Fertilizer Stocks
The Week in Fertilizer Stocks
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 80.15 | 79.75 | 88.69 |
| CF Industries | CF | 174.05 | 171.18 | 134.56 |
| Intrepid Potash | IPI | 24.98 | 25.18 | 36.94 |
| Mosaic | MOS | 55.37 | 53.85 | 78.81 |
| PotashCorp* | POT | 45.81 | 45.54 | 55.90 |
| Terra Nitrogen | TNH | 190.00 | 191.00 | 97.85 |
| CVR Partners | UAN | 28.06 | 27.98 | N/A |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 44.32 | 42.62 | 39.36 |
| Deere & Co. | DE | 87.66 | 86.94 | 90.99 |
| Scotts | SMG | 47.83 | 47.73 | 53.52 |
| * represents three-for-one stock split | ||||
Spot Barge Prices
Ammonia
U.S. Gulf/Tampa: Tampa prices for February dropped to $472/mt DEL, down some $83/mt from January’s $555/st mt DEL.
Sources said the drop was in line with recent erosion in Yuzhnyy. Demand was reported to be off, and unsold product was reportedly on the market. Sources cited the recent cuts in DAP production, as well as caution from some other industrial customers. In addition, sources said fears about the Euro crisis continue to linger. Sellers were hopeful the bottom has been found.
In the meantime, sources continue to speculate that extra tons from the Mosaic Faustina plant and the OCI Beaumont plant should spur new spot trades on the barge market.
Eastern Cornbelt: The anhydrous ammonia market was tagged at $650-$670/st FOB regional terminals, but higher postings were in effect. CF’s ammonia postings for the Jan. 24-27 shipping period included $660/st FOB Kingston Mines, Ill.; $665/st FOB Mt. Vernon, Ind.; $670/st FOB Illinois terminals at Albany, Cowden, Peru, and Seneca; $675/st FOB Terra Haute, Ind.; and $680/st FOB Indiana terminals at Frankfort and Huntington.
Western Cornbelt: Iowa sources said fertilizer movement to the field had slowed due to the arrival of colder temperatures and snowfall at mid-month. Another cold front was taking aim at Nebraska late last week, with freezing rain and snow on tap for northeastern areas of the state by Jan. 27.
The brisk application pace reported earlier in January gave some dealers a jump on their expected spring demand. One Iowa contact estimated that at least 25 percent of his business’s typical spring business has already been completed.
Sources quoted the ammonia market as low as $595-$635/st FOB Western Cornbelt terminals last week. One Iowa contact reported a prompt market of $620/st FOB. CF raised its ammonia postings for the Jan. 24-27 shipping period, however. New postings included $640/st FOB Nebraska terminals at Aurora, Blair, Fremont, Greenwood, and Hastings; $645/st FOB Iowa terminals at Port Neal and Whiting; $660/st FOB Iowa terminals at Garner and Spencer; and $670/st FOB Palmyra, Mo.
In the Southern Plains market, CF’s ammonia postings included $575/st FOB Oklahoma terminals at Verdigris and Woodward, $610/st FOB Conway, Kan., and $620/st FOB Clay Center, Kan.
Northern Plains: Minnesota sources pegged the low end of the prompt ammonia market in the $640-$650/st FOB range at midweek. Delivered ammonia in North Dakota was reported at the $750/st level for spring prepay.
CF’s ammonia postings for the Jan. 24-27 shipping period included $665/st FOB Mankato, Minn., $675/st FOB Pine Bend, Minn., $680/st FOB Glenwood, Minn., and $715/st FOB Velva and Grand Forks, N.D.
Eastern Canada: Ontario sources quoted recent offers for anhydrous ammonia out of Courtright, Ontario, in the $740-$780/mt FOB range, with the low for prompt tons and the upper end for prepay.
Black Sea: As Asia opened for business Friday, sources looked at the impact of the new Tampa price on the Yuzhnyy market.
Earlier estimated netbacks from the Tampa price of $472/mt CFR came in at $370-$380/mt FOB. After the dust settled, however, Asian sources are saying the price is closer to $400-$410/mt FOB.
The price from the area had been on a steady decline. In reaction to the softer prices, OPZ shut down earlier this month to tighten supplies.
One Asian source noted that the ammonia suppliers faced a problem of industrial buyers not needing as many tons as in previous years because of the global economic downturn. Agricultural demand for ammonia, said one trader, has only been affected slightly. The real downturn in demand has come from industrial buyers because of reduced demand for the