All Posts from December 10, 2012

Taylor Farms ammonia leak causes stir

News, News Briefs

Annapolis Junction, Md. — An anhydrous ammonia leak from a refrigeration unit inside the warehouse at Taylor Farms Food Service here early Saturday, Dec. 1, brought out firefighters. Approximately 200 employees were evacuated, and three were evaluated by paramedics but refused transport. A Howard County DFRS special operations team was able to stop the leak, which was blamed on a failed gasket in a refrigerant piping system, and large fans were used to ventilate the warehouse.

IPL closes urea tender

Breaking Industry News

IPL closed its tender Dec. 8 with about 1.5 million mt offered. The lowest price was $404.45/mt CFR for 100,000 mt from Transglobe. Other offers were in the same neighborhood. An additional 550,000 mt were offered in the $406-$409/mt CFR range.

Sources reported over the weekend that IPL will make its counter-bid to the rest of the companies offering tons early this week. The most likely scenario is that IPL will start with the Transglobe price and then offer small adjustments based on the port of discharge.

The average price in this tender came in at $414/10/mt CFR as compared to the $416/mt CFR average for all the offers in the MMTC tender outside the Swiss Singapore offer of $389.50/mt CFR.

The Swiss Singapore offer left MMTC with the ability to issue an award for only 50,000 mt. The results of the IPL tender could lead to a much larger purchase that gets India closer to fulfilling its urea needs for the current year.

India still needs about 1 million mt to close out the year. If IPL can get several of the offering companies to accept the Transglobe number of $404.45/mt CFR, it will be close to meeting the country’s needs. If IPL does not take 800,000-1 million mt in this round, sources expect to see another tender called soon.

Univar to buy specialty fert maker Magnablend

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Redmond, Wash. and Waxahachie, Texas — Univar, a global leader in the distribution of industrial and specialty chemicals and related services with $9.7 billion in sales, said Dec. 5 that it is acquiring Magnablend, a provider of custom chemical manufacturing, blending, and packaging solutions. The deal is expected to close this month. Additional details were not released. "The acquisition of Magnablend is an important step forward in Univar’s continued focus on the rapidly-growing, North American oil and gas market,” said Univar President and CEO Erik Fyrwald. “Magnablend’s geographic position at the heart of current and developing shale basins allows us to offer a comprehensive suite of products and services to meet increasing customer demand.” Of particular interest to Univar, Magnablend specializes in completion chemicals used in the oil and gas industry, including guar gum slurries, cross linkers, breakers, and buffers, and has provided chemical formulation and blending services to the oil and gas and agriculture industries for over 30 years. As for ag, this includes specialty fertilizer blending, such as NPKs (powder and liquid), soluble borons, foliar, and adjuvant, as well as microemulsions and dispersions. It is also involved in micronutrients, nitrogen stabilizers, and root enhancers. The company said bulk storage of raw materials – specifically anhydrous ammonia – allows it to be competitive. It also sources urea, potash, nitric acid, DAP, phosphoric acid, and other phosphates. Magnablend is also involved in animal nutrition and feed supplements. Founded in 1979, Magnablend had 2012 sales over $400 million, with facilities in Texas, Pennsylvania, Wyoming, and North Dakota. In Canada, Univar is a leading wholesale distributor of crop protection products to independent retailers and specialty applicators. Its Environmental Sciences unit is the largest distributor of pest control products and equipment in North America, serving the structural pest control, public health (vector), turf & ornamental, food processing, post harvest, animal health, and hay production markets. It is also involved in water treatment chemicals, including algae control. Univar operates a global network of more than 260 facilities in North America, Europe, the Asia-Pacific region, and Latin America, with additional sales offices located in Eastern Europe, the Middle East, and Africa.

Simplot acquires Texas company

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Boise — Migl Feed and Grain, an agricultural supply company located in Hallettsville, Texas, will join the J. R. Simplot Co.’s Grower Solutions network. “Our goal at Simplot Grower Solutions is to continue to grow our business by expanding our reach in strategic areas such as the Texas Gulf Coast as we focus on meeting customer needs,” said Dave Dufault, head of Simplot Grower Solutions retail stores. “Migl fits in very well.” “We felt that Simplot Grower Solutions was the best fit for our community, our employees, and our customers. Their commitment to agriculture is well known throughout the industry,” said Frank Migl, owner of Migl Feed and Grain. The company will remain focused on providing customers with a full line of crop nutrients, crop protection, seed, specialty products, and agricultural technology. “For over 75 years, the Simplot Co. has played a significant role in various sectors of the global food and agriculture system, and this long-term commitment continues,” said Garrett Lofto, Simplot AgriBusiness president. “Migl Feed and Grain fits in very well with our existing Texas operations, and we look forward to their employees joining our Simplot team.” Migl includes one location, while Simplot Grower Solutions has more than 250 crop advisors and more than 90 retail locations.

LSB reports progress on El Dorado acid plants

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Oklahoma City — LSB Industries Inc. said Dec. 4 that its chemical business’s El Dorado, Ark., facility has signed an agreement with Weatherly Inc. for the licensing, engineering, and procurement of major manufacturing equipment for a new 1,100 ton per day, 65-percent-strength nitric acid plant. The new plant is expected to be operational by mid-2015. In addition, the company is currently negotiating a contract for the purchase of a plant to work in conjunction with the new nitric acid plant that further concentrates a portion of the output up to 98.5 percent strength. The cost of the new nitric acid plant, the nitric acid concentrator plant, and supporting facilities, including construction, is anticipated to total approximately $120 million, a significant portion of which is expected to be paid from insurance proceeds resulting from the May 15, 2012 event that damaged the El Dorado facility. The amount of insurance proceeds is not known at this time. An explosion occurred at the facility in May (GM May 21, p. 1), destroying the existing concentrated acid plant and idling the rest of the complex, including nitric acid and ammonium nitrate production into the summer, while sulfuric acid has remained offline until just recently. LSB said the latter plant’s commencement represents the final phase of repair and production recovery at the facility following the May explosion, other than the construction of the aforementioned new nitric acid plant and acid concentrator plant. “All of the plants at the El Dorado facility are up and running, other than the DSN plant, which is being replaced by the new Weatherly nitric acid plant,” said Jack Golsen, LSB’s board chairman and CEO. “With the addition of a new nitric acid plant and concentrator, we believe that the El Dorado facility will be able to regain its position as a leading merchant marketer of concentrated nitric acid in the United States.” In the meantime, LSB has suffered an explosion limiting production at its Cherokee, Ala., nitrogen facility (GM Nov. 19, p. 1), and its Pryor, Okla., ammonia plant went down in November for unplanned maintenance, with the time being used to install a replacement ammonia converter (GM Nov. 26, p. 9).

Gavilon fire could have been a lot worse

News, News Briefs

Avalon, Wisc. — Firefighters from several local townships had more to worry about than just containing a fire Tuesday, Nov. 27, at a Gavilon Grain location here. There was a natural gas line, a railcar full of anhydrous ammonia, and hundreds of thousands of bushels of corn that could have turned into a huge disaster. As it turned out, the maintenance shed next to the grain storage facility was damaged and the grain elevator itself had minimal damage, according to Mary Palu, spokesperson for Gavilon. In addition, approximately 20 Avalon residents had to evacuate the area, but returned to their homes later that evening. Fortunately, no injuries were reported. Sgt. Mark Thompson of the Rock County sheriff’s department said homes were evacuated as a precautionary measure. “They were able to cool down the railcar containing anhydrous ammonia with water, and move it away from the building,” he added. The fire department said the railcar was located within 100 feet of the building. A large, above-ground natural gas pipe was also located west of the building. Firefighters were able to put out the fire before it spread further. Palu said the grain elevator in Avalon was open for business Wednesday, Nov. 28. The actual cause of the fire remains under investigation.

Salazar issues order on NM potash, oil & gas development

News, News Briefs

Washington — U.S. Secretary of the Interior Ken Salazar on Dec. 3 issued a new Secretarial Order to facilitate the co-development of oil, natural gas, and potash resources within the 500,000-acre Designated Potash Area (DPA) in southeast New Mexico. “This comprehensive strategy will allow us to move beyond years of disagreement and litigation between the energy and potash industries and provides a balanced approach that will strengthen New Mexico’s economy,” he said. Both The Mosaic Co. and Intrepid Potash Inc., the two potash companies operating in the basin, participated on the Joint Industry Technical Committee, which worked to find a solution to the longstanding issue. The final strategy, first released in July (GM July 16, p. 14) provides greater certainty to mineral lessees and for the orderly development of resources. The DPA contains significant deposits of both potash and oil and gas, most of which is managed by the Bureau of Land Management (BLM). The DPA currently produces 75 percent of the potash mined in the U.S. and has nearly 800 federal oil and gas leases. The Order calls for the use of emerging technologies associated with horizontal drilling and production of oil and gas to help minimize impacts and surface disruption. The designation of Development Areas where oil and gas wells could be drilled from one or more Drilling Islands will reduce the number of roads, power lines, and other facilities that can impact potash resources and the safety of potash miners. These techniques will result in more orderly development and greater recovery of all the products. The Order also encourages regular, constructive discussion among the industries and the BLM, and provides an industry forum to jointly address any concerns that arise in specific situations. Drilling for oil and gas will be permitted only in the event that the lessee establishes to the satisfaction of an Authorized Officer – BLM – that such drilling will not interfere with potash mining and likewise, no potash mining or exploration can unreasonably interfere with the orderly development and production of oil and gas leases. The final order, along with the notice of availability on the analysis of comments received on the draft order, will be published in the Federal Register. More information on the Secretarial Order is available on the BLM’s website, http://www.blm.gov/nm/potashorder.

Ownership change does not impact N-Flex grant

News, News Briefs

Bismarck — North Dakota State Industrial Commission officials are okay with a $1 million grant to N-Flex (GM Dec. 3, P. 11), even though they were not aware of a change in ownership prior to awarding the grant. Karlene Fine, commission executive director, said members were informed about the change only after they had approved the grant, but still were aware that something was in the works. “As long as the project is the same and they (the new owners) meet the same conditions, the grant remains.” Fine emphasized that N-Flex had to show that they had the funding to complete the project. “Understand that this is a $4 million project and they had to have the wherewithal to raise that money. We knew at the time that they were talking to other investors.” N-Flex, which has the promise of turning flared gas in the North Dakota oil fields into on-demand ammonia fertilizer, has been sold in its entirety to Beowulf Energy – coincidentally at the same time it was announced that the technology had received a the $1 million grant. “The reason why I did this is because of financial uncertainties,” said previous owner Neil Cohn. “They have an experienced engineering team and own and build power plants, and this is a very natural thing. The new company will be called Beowulf N-Flex. I am staying on with the company and will have the title of executive vice president.” He also said that Glen Buckley of NPKFAS will be a part of the new organization acting as an active adviser, which he insisted will be “not a small role.” Cohn said the N-Flex ammonia model has “long legs” and presents a lot of opportunities that make sense, adding that Beowulf has the ability to fund and operate them and to either own them outright or in partnerships. Beowulf Energy didn’t respond to inquiries last week. It is identified as a power producing company that develops and operates fossil-fueled and renewable power generating facilities. Founded in 1995, it is based in Easton, Md., with offices in New York and Colorado.

The Andersons concludes Green Plains purchase

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Maumee, Ohio — The Andersons Inc. said Dec. 3 that it has completed the purchase of a majority of the grain and agronomy locations of Green Plains Grain Co. LLC, a subsidiary of Green Plains Renewable Energy Inc. (GM Nov. 5, p. 13). "We are significantly diversifying our grain and agronomy businesses by expanding into Iowa and Tennessee with the acquisition of these high quality assets. Expanding our connectivity to the ‘farm gate’ is part of our long-term strategy," said Denny Addis, Grain Group president. "We are embarking on a new opportunity with a new team in new communities, and look forward to providing service to thousands of new customers. We are fortunate to be adding a skillful, knowledgeable, and customer-service oriented 130-member workforce to our grain and agronomy teams. The drought aside, this year has been significant for the Grain Group in terms of growth." The purchase includes seven facilities in Iowa and five in Tennessee, with a combined grain storage capacity of about 32 million bushels, which increases the Grain Group’s storage capacity by nearly 30 percent. Two Iowa locations also have 30,000 tons of combined fertilizer storage. The Iowa facilities are located in Spencer, Superior, Milford, Gruver, Everly, Greenville, and Langdon. According to The Andersons, the agronomy centers are in Everly and Superior, with Gruver also listed as a seed and chemical site. The Tennessee locations involved in the sale are in Como, Dyer, Kenton, Trenton, and Union City, and are all primarily grain storage facilities. The Como and Dyer locations also handle bagged feed and/or seed.

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