Two new nitrogen projects reported progress toward the end of 2016. CF Industries Holdings Inc. on Dec. 28 announced that the new ammonia and urea plants at the company’s Port Neal, Iowa, Nitrogen Complex have been successfully commissioned and started-up, marking the completion of the company’s capacity expansion projects. OCI NV’s Iowa Fertilizer Co. said its new nitrogen plant at Wever was 98 percent complete as of Dec. 26.
CF said the ammonia plant, which began production in late November, has operated at approximately its nameplate capacity of 2,425 st/d as of Dec. 28. It said at the time that while the back end of the plant (ammonia synthesis) was taken offline to replace a gasket, it was expected to resume production shortly. CF said the front end of the ammonia plant continued to operate and produce carbon dioxide, which is used to feed the new urea plant.
CF said the urea plant, which was commissioned earlier in December, produced granular urea on specification. However, as of Dec. 28, the urea plant was also offline to replace a relief valve and was expected to resume production shortly.
“CF’s capacity expansion projects are complete,” said Tony Will, CF president and CEO. “With projected returns significantly above our cost of capital, we have built the foundation for CF’s growth and greatly increased our cash generation capability.”
Total annual gross ammonia capacity at Port Neal is now 1.2 million st, up from 380,000 st previously. Output from the new ammonia capacity will largely be upgraded to urea. Total annual urea capacity at Port Neal is now 1.4 million st, up from 50,000 st previously. Total annual UAN capacity remains largely unchanged at 800,000 st.
In the meantime, Iowa Fertilizer told the local community Dec. 26 that ammonia plant startup activities began during the last days of 2016, and to expect steam releases, lighting, and natural gas flares as these activities will take place at the plant over the next several weeks and are standard steps in the startup process. The company also announced that it has completed a $10 million road project to access the plant, the startup of the boilers, and air blows of pipe and other equipment. Once production begins, Iowa Fertilizer will produce 1.5-2 million mt/y of nitrogen products.
Neither CF nor Iowa Fertilizer responded to New Year inquiries as to updates on their production.
Despite the progress at the two plants, most industry watchers said the news and production are coming too late to fully meet the needs for the 2017 spring season, especially in light of a 1.2 million st fertilizer year-to-date lag in urea imports. Most last week were predicting firmer urea and UAN prices in the near term.
There has been much speculation on what will happen to nitrogen prices once a new entrant – Iowa Fertilizer – joins the market. When the plant was seeking approval in the state, farmers were promised that it would bring lower fertilizer prices, and some have predicted that will be the case. However, sources reported that to date, the ammonia prepay product the company has offered into the market so far has not been at “market buster” prices. “They have a new plant to pay for and I doubt they’ll go rogue,” said one source last week. “It will be interesting to see how all this pans out.”