The Port of Vancouver USA reports that it has allowed an agreement that held nearly 100 acres at the port’s Terminal 5 for BHP Billiton’s exclusive use to expire as of June 16. The property was selected by BHP Billiton in 2010 as its preferred site for a potash export facility to support the development of its Jansen Project in Saskatchewan, Canada.

The port said the decision by both parties to allow the agreement to lapse enables the port to move forward on developing a prime piece of property and, at the same time, keeps the option open to continue discussions with BHP Billiton about locating a potash export facility at the Port of Vancouver in the future.

“Fortunately, we have multiple properties, including Columbia Gateway, that could support this project, which enables us to be flexible,” said Todd Coleman, CEO for the port. “And because our relationship with BHP Billiton remains positive, we’re in a strong position to work with them in the future.”

Columbia Gateway includes more than 500 acres of property available for future development and would allow the port to accommodate the needs of BHP Billiton or other similar world-class companies. Also, because the Terminal 5 acreage is no longer under an exclusivity agreement with BHP Billiton, the port can now market this property for other uses, creating more immediate benefits to the port and the community.

“We’re confident that we can find a new tenant for Terminal 5 in the near future,” said Coleman. “It’s an extremely attractive property due to its size and access to river, road and rail transportation.”

The exclusivity agreement between the port and BHP Billiton was included in the Agreement for Lease, one of three definitive agreements the two parties entered into in February 2012. The two other agreements include a Site Improvement Agreement and an Entry Agreement. All three agreements expired on June 16. A final lease between the parties was not signed.

BHP Billiton said it has opted to allow the exclusivity agreement for Terminal 5 at the Port of Vancouver, Wash. to lapse. It said this will allow it to actively investigate and assess alternative rail and port options for the Jansen Potash Project. “We have said we will continue to modulate the pace of Jansen development as we time our entry into the potash market to meet market demand,” the company said in a statement. “This disciplined approach gives us the flexibility to consider a broad range of options for the rail and port, including the Port of Vancouver, Wash.”

“BHP Billiton has been engaged in discussions with Burlington Northern Santa Fe (BNSF) and Canadian Pacific (CP) regarding the provision of rail services to the Port of Vancouver for four years, but has been unable to reach agreement regarding the rail service in to Terminal 5,” continued BHP.

“BHP stressed that it remains committed to the Jansen investment. “We believe that Jansen is the world’s best undeveloped potash resource and is likely to be one of the lowest cost sources of supply once fully developed. Investment in Jansen could underpin a potential fifth pillar of BHP Billiton, given the opportunity to develop a multi-decade, multi-mine basin in Saskatchewan,” it added.

Tampa anhydrous ammonia prices moved down to $520/mt CFR for July. They dropped $20/mt from June’s $540/mt CFR. For more information, see the Green Markets Web Edition June 27.

Sources report that STC has issued an award to Aires for 60,000 mt of urea at $266/mt CFR to be unloaded at Krishnapatnam. An additional 90,000 mt is reportedly ready to be awarded for Iranian tons.

The STC action comes following its counterbids to the June 18 urea tender. The bids were $266-$269/mt CFR for East Coast ports, and $268-$271.75/mt CFR for West Coast ports. STC included Emirate dinar equivalents in its bids. West Coast urea is expected to be all Iranian.

Sources report that companies offering Chinese material have mostly rejected the STC counterbid. Reportedly the Chinese producers have dug in their heels at $260/mt FOB.

In a statement issued June 19, the Chinese Nitrogen Fertilizer Industry Association said matching the Aries price would force Chinese companies to face losses of as much as 80 percent on each ton sold. The statement further denounced the low price as “dumping” and called on its members to take action to boost market confidence.

The rejection of support by the Chinese producers could leave STC with only 150,000 mt out of an expected purchase of 1.5 million. Sources confirmed over the weekend that a new tender will have to be held quickly to meet the urea needs of Indian farmers. Some argue, however, that the small purchase from the STC tender could be enough to hold off panic buying long enough to ensure that no spike in price occurs when the next tender is called.

FNA Fertilizer Limited Partnership (FNA FLP), the business formed in 2012 by Saskatoon-based Farmers of North America (FNA), announced on June 18 that it has selected a location near Belle Plaine, Sask., for its proposed $1.7 billion farmer-owned ProjectN nitrogen fertilizer manufacturing facility.

The announcement was made Wednesday afternoon at Canada’s Farm Progress Show in Regina, Sask. No other details were disclosed about the specific location, but FNA FLP said access to natural gas, available electrical and water supplies, a skilled regional workforce, and logistics infrastructure such as roads and access to both national railways were key factors in the site location.

“This announcement is an important step in project development and demonstrates a distinctly tangible milestone,” said FNA FLP Spokesperson Bob Friesen. “The types of industries that are already located in the Regina-Moose Jaw corridor make it a logical place to locate.”

The date for when construction can begin has not yet been set until the equity for the project has been raised. Should the plant proceed, FNA FLP said the project would have a “significant impact” on the province of Saskatchewan, creating some 1,900 construction jobs and approximately 170 full time positions when the plant is operational. “We have been working with representatives of the provincial government and appreciate those efforts as we move this project forward,” the company said.

Friesen said in May that FNA FLP also hoped to make an announcement soon about a strategic partner in the project, but that partner has not yet been disclosed. "We’re having ongoing meetings with interested third-party investors,” Friesen said. “As soon as we get an MOU (memorandum of understanding) done, we hope to have an announcement.”

Friesen said farmer investment in the proposed plant has been strong, helped by high fertilizer prices this spring. “They clearly see the need for something like this – both for fertilizer supply security as well as the manufacturing margin,” he said. “When you’re talking urea pushing $900 a tonne and the cash manufacturing costs are still well under $150, farmers are realizing how important this is.”

Dead Sea Works workers have imposed sanctions at the company’s plant in Sdom. Workers prevented all shipments of potash from the plant. The sanctions began this morning and are until further notice. They are in protest of Israel Chemicals management steps to unify the administrative and management teams of its subsidiaries. DSW union head Moshe Lankry charged management was violating agreements with the union by taking unilateral measures without prior negotiations with the union. The union charges that the move could lead to the laying off of 200 workers.

Earlier this year ICL management started implementing a reorganization plan. The first step involved the firing of 115 workers from its financially-troubled Rotem Amfert subsidiary. The company said that the recovery plan would involve additional layoffs as part of an effort to reduce costs and improve efficiency.

Almost 3 million mt were made in firm offers in the STC urea tender that closed today. Another 840,000 mt we offered as optional sales.

Prices hovered in the $270s/mt CFR except for outlier Aires who offered 110,000 mt at $266/mt CFR and $273/mt CFR, based on the port of discharge. Both offers were for East Coast ports.

The next lowest prices were from Swiss Singapore with one cargo to Krishnapatnam at $270/mt CFR and Global Transnational at $272/mt CFR. Both offers were backed by Iranian material. Ameropa offered at $272.10/mt CFR with what looks to be Chinese urea.

Offers are valid until June 25.

Traders were shocked by the Aries offer and some have questioned if the companies that offered in the low-$270s/mt CFR will – or are able to – match the Aries number.

STC was expected to take more than 1 million mt in this tender. If no one can match the Aries number, however, another tender will most likely have to be called soon.

Following the Borealis acquisition of GPN SA including 52.15 percent ownership in the Le Havre urea plant, Yara International ASA has accepted an offer from Borealis to acquire Borealis’ ownership in Le Havre, situated on the north-west coast of France.

Yara currently holds 47.85 percent in the 320,000 mt/y urea production facility, and 100 percent in 400,000 mt/y ammonia production facility.

The acquisition will simplify overall management of the facility to the benefit of Yara’s activities in France and in Europe, and will allow greater flexibility and optimization of the site.

Access to an additional 160,000 mt/y urea will allow Yara to expand its sales to industrial customers in markets such as nitrogen oxide abatement (DeNOX), AdBlue and the animal feed sector.

The agreement with Borealis includes a urea supply agreement during a transition period.

Russia’s Gazprom on June 16 announced it would switch Ukraine’s Naftogaz to a prepayment plan for gas supplies, citing overdue debt of US$4.5 billion. Starting from June 16, Gazprom said the Ukrainian company will receive only prepaid volumes of Russian gas.

Gazprom has also filed suit in Stockholm International Arbitration Court to recover the $4.5 billion.