A new supply of nitrogen solutions distributed by Koch Nitrogen Co. could hit the market in August. Dyno Nobel, the manufacturer of the product, is this month revving up its new 290,000 st/y of UAN capacity at its Cheyenne, Wyo., nitrogen complex. Expectations were that the product would be available in the third quarter; that now appears to be sooner than later. Dyno and Koch announced late April (GM April 28, p. 10) that Koch will take 100 percent of the product under a tolling agreement.
Koch Nitrogen President Steve Packebush noted in April that the deal opens up a new region for the company, allowing it to better serve new and existing customers. Under the agreement, Koch will be providing anhydrous ammonia to supply the new upgrade. The older AN facility will continue to be supplied by an existing Dyno Nobel ammonia plant.
The Dyno Nobel/Koch tolling agreement is for two years, renewable for one, according to sources.
As for Dyno Nobel, with good demand from the fertilizer sector, the company is opting to put plans for additional ammonium nitrate production on hold at Cheyenne. However, not all of the recent upgrade will go into UAN. The upgrade adds 200,000 st of AN capacity to Cheyenne, bringing total production at the site to 500,000 st. Of the new AN capacity, three-fourths is expected to go to UAN, with the rest going to AN for the explosives market.
Last summer there were company concerns that the cost of the Cheyenne upgrade would go from $50 million to $80 million (GM Aug. 27, 2007, p. 1). However, now with some extra AN development on hold due to the Koch deal, the number is less clear. The company declines to give a further update at this time. Since the upgrade was on an existing MTBE site, sources say savings were gained since some infrastructure was already in place.