SynGest Inc., the San Francisco-based company that plans to build a $102 million corn cob-based anhydrous ammonia plant near Menlo, Iowa, says it has signed a letter of intent with Heartland Co-op, West Des Moines, to explore a partnership to make and sell the ammonia.
SynGest says Heartland would be an equity and retail partner. The plant is expected to use about 130,000 st/y of corn cobs to produce 50,000 st/y of ammonia. SynGest CEO Jack Oswald says that Iowa could eventually accommodate 20 bioammonia plants.
“We are very supportive of this process. It’s good for our industry and good for the state of Iowa,” said Dave Coppess, Heartland executive vice president. Coppess told Green Markets that Heartland has been in contact with SynGest since January. “We’ve had an ongoing discussion with them about our role,” he said. “We’ve been an active partner with them in this process so far.”
Coppess said Heartland has committed no funds to the project to date. “Our interest is limited to the (ammonia) off-take, storage and marketing, and to cob collection,” he said. “Whether we take an actual equity position is still to be determined.”
Coppess said the SynGest location is on the western edge of Heartland’s trade area. One of the biggest challenges is to develop an efficient process for cob collection, he noted, but the co-op is excited about the possibilities. “We really like the idea of taking a waste product and using it to generate a viable ammonia product,” he said. While acknowledging that there are still “a lot of negotiations to be done and decisions to be made,” Coppess said he is hopeful the partnership will yield a “long-term, sustainable supply” of ammonia. “We see it as a viable alternative that would be good for Heartland,” he said.
SynGest recently received a $2.5 million loan from the Iowa Power Fund (IPF), though the company says the form and final terms remain under negotiation. Previously, the company had already received state benefits of over $3 million, which included a $2 million loan from the Iowa Department of Economic Development (GM Aug. 31, p. 11), as well as tax credits and educational support. In addition, it plans to ask the U.S. Department of Energy for a $50 million grant.
Coppess said Heartland has committed a letter of support for SynGest’s DOE grant application.
Heartland has some 48 locations throughout central Iowa. The cooperative was formed in 1987, and grew through numerous acquisitions during the 1990s and 2000s. According to its website, Heartland has annual sales of more than $560 million, and a workforce of 340 employees in the company’s agronomy, grain, energy, feed, and credit divisions. Heartland operates 28 agronomy facilities throughout central and east-central Iowa.