All Posts from February 10, 2023

Landus Conduit LLC – Management Brief

Management Briefs, Western Cornbelt

Landus Conduit LLC, Des Moines, on Feb. 7 announced that John Schmahl has been named Director of Strategic Partners. The company said he brings a wealth of experience in the agricultural start-up space and relationships with potential up- and downstream partners.

Schmahl joins Landus Conduit after nearly five years in the startup world with Indigo and Farmers Edge, where he was responsible for the US strategic accounts and managed sales teams across the Eastern US. Prior to that, he gained experience from all sides of production agriculture and retail during his time with Monsanto, Cargill, and Winfield United.

The primary function of Conduit, launched by Landus in November 2022 (GM Nov. 23, 2022), is to cultivate relationships and partnerships benefiting Landus farmer-owners outside of the traditional boundaries in which Landus currently operates.

“Landus Conduit is a key connector to the growth and value of Landus for our farmer-owners where we seek to find new opportunities without the historical costs of brick-and-mortar buildings,” said Landus President and CEO Matt Carstens. “Supplementing Conduit’s ambitions with someone like John, who has experience in the startup environment, brings us a network of skills needed to be successful as we build out our global footprint.”

“The addition of John makes a substantial difference to how we approach partnerships in areas where Landus doesn’t currently do business,” added Bruce Vernon, who leads Landus Conduit. “Having him on board builds our connections outside the Midwest region and beyond.”

The company said the expansion of the customer base goes beyond neighboring regions to farmers outside the US. Landus currently employs more than 600 people across the Midwest and Mexico.

RWE, Lotte Join Mitsubishi in Plans to Develop Giant Corpus Christi Clean Ammonia Complex

Ammonia, Blue Ammonia, Featured, Germany, News, South Korea, Texas

Germany’s RWE Supply & Trading, Essen, a multinational utility company, and South Korea’s Lotte Chemical Corp., Seoul, have signed a Joint Study Agreement (JSA) with Mitsubishi Corp., Tokyo, to develop a large-scale integrated clean ammonia production and export project at the Port of Corpus Christi, Texas.

The three announced the signing of the JSA on Feb. 8 to form a strategic alliance to jointly develop large-scale clean ammonia (green and blue ammonia) supply chains in Asia, Europe, and the US.

Under the JSA, the partners agreed to jointly study the development of a large-scale ammonia facility that integrates green and blue ammonia production and leverages common infrastructure for international exports with a focus on Asia and Europe. The partners target first production by 2030 and a phased build-out of production capacity with multiple production units.

In the final build-out stage the project is envisaged to produce up to 10 million mt/y of clean ammonia. The land required for the project is under discussion with the Port of Corpus Christi Authority. The partners are bringing together complementary expertise to develop the project.

Bloomberg reported last fall that Mitsubishi was considering the development of the world’s largest ammonia production plants at Corpus Christi (GM Sept. 30, 2022).

The parties said the JSA complements other preliminary efforts to develop large-scale clean ammonia projects including the South Texas region.

In the meantime, the Port of Corpus Christi is getting ready for blue and green ammonia development. On Feb. 1 it announced that it was awarded $16.4 million through the US Department of Energy’s (DOE) Carbon Storage Assurance Facility Enterprise initiative to evaluate the technical and economic feasibility of permanently storing captured carbon dioxide from industrial operations. It said it was the only recipient of CarbonSAFE funding in Texas and received the largest total award of those announced by DOE.

In addition, in January the Port was notified by DOE that it was being encouraged to submit a full application for its Horizons Clean Hydrogen Hub (HCH2) though DOE’s Regional Clean Hydrogen Hubs Program.

Last August, the Port approved a lease agreement with Buckeye Partners LP that will establish the first solar farm in the 100-year history of the Port. The 81,000+ panel project will be located in San Patricio County on Port of Corpus Christi property near Midway Junction.

All three JSA partners are already heavily involved in blue and green ammonia and/or hydrogen development. In addition to the Corpus Christi plans, Mitsubishi announced in 2021 that it was eyeing the development of a 1 million mt/y blue ammonia plant between Donaldsonville, La., to the west of Houston (GM Sept. 24, 2021), as well as a smaller project in Alberta.

In addition, Mitsubishi has signed to take up to 40% of the blue ammonia from a proposed Nutrien Ltd. ammonia plant in Geismar, La. (GM May 20, 2022). The company has been in the ammonia trading business since the late 1960’s and is currently the indirect shareholder of PT Panca Amara Utama (PAU), which is responsible for a 700,000 mt/y ammonia plant in Indonesia.

RWE announced plans to build an ammonia import terminal in Brunsbüttel, Germany by 2026. It said it is driving forward with more than 30 green hydrogen projects. It recently signed a Memorandum of Understanding with Namibia’s Hyphen Hydrogen Energy, Windhoek, for supply of up to 300,000 mt/y of green ammonia from 2027 (GM Dec. 9, 2022), and it is looking at bringing green hydrogen/ammonia to Europe from Australia (GM April 23, 2021).

Lotte has signed a deal with Japan’s Itochu, Tokyo, to jointly invest in ammonia production facilities (GM July 29, 2022) and has inked an offtake agreement to take green ammonia from Trammo Inc. (GM Sept. 17, 2021). In late 2022, it partnered with six other companies to build a clean ammonia supply chain in the West Sea region of Korea. Lotte said it plans to invest $3.6 billion by 2030 to produce 1.2 million mt/y of clean hydrogen, and hopes to make annual revenue of $3.6 billion from its hydrogen and ammonia business.

Analysts See Stellar Full-Year Adj. EBITDA for CF, Nutrien, Mosaic; 4Q Stalls

Ammonia, Ammonium Nitrate, Earnings, Eastern Cornbelt, Featured, News, Nitrogen, Phosphate, Potash Muriate, Saskatchewan, Tampa, UAN, Urea

CF Industries Holdings Inc., Nutrien Ltd., and The Mosaic Co. are all expected to have stellar adjusted EBITDA for the year-ending Dec. 31, 2022, versus 2021 figures, according to the Bloomberg Consensus, the average estimate from major analysts. The annual figure for CF is expected to double, with fourth-quarter up 10%.

Mosaic’s full-year adjusted EBITDA is estimated to be up 78% from 2021, while fourth-quarter results are expected to be flat with year-ago levels. Nutrien results are seen as being up 77% versus 2021, with the fourth-quarter level with year-ago.

Many analysts are keeping a close watch on fourth-quarter volumes. CF is expected to see a fourth-quarter drop in ammonia and UAN volumes, according to the analysts, with other products flat to up slightly. On the wholesale level, they project Nutrien will report drops in both potash and phosphate volumes, with an overall uptick in nitrogen. They also see a potash and phosphate drop for Mosaic with Mosaic Fertilizantes level with year-ago volumes.

CF and Nutrien will report results after market close on Feb. 15, with Mosaic’s out on Feb. 22.

CF 4Q-22 4Q-21 2022 2021
Adj. EBITDA 1.39 1.26 5.96 2.74
Revenues 2.85 2.54 11.4 6.54
Net Income .828 .705 3.37 .917
Sales Volumes        
Ammonia 1.07 1.18 3.47 3.6
Granular Urea 1.02 1.02 4.56 4.3
UAN 1.69 1.84 6.8 6.6
AN .376 .374 1.62 1.72
Other .581 .569 2.2 2.32
Mosaic 4Q-22 4Q-21 2022 2021
Adj. EBITDA 1.21 1.22 6.4 3.6
Revenues 4.24 3.84 18.9 12.3
Net Income .700 .665 3.85 1.63
Sales Volumes        
Potash 1.97 2.1 8.2 8.2
Phosphate 1.65 1.8 6.63 7.7
Mosaic Fertilizantes 2.3 2.3 9.22 10.1
Nutrien 4Q-22 4Q-21 2022 2021
Adj. EBITDA 2.47 2.46 12.6 7.13
Revenues 7.6 7.3 37.6 27.7
Net Income 1.36 1.21 7.84 3.18
Sales Volumes – Wholesale        
Potash 2.7 3.06 12.6 13.6
Nitrogen 2.93 2.83 10.4 10.73
Phosphate & AS .666 .711 2.5 2.62

*Financials are in $ billions, volumes in millions of tons.

Uniper Eyes Green Ammonia Offtake Agreement with India’s Greenko

Germany, Green Ammonia, India, News, News Briefs

Uniper, Dusseldorf, Germany, an international energy company with activities in more than 40 countries, and Greenko ZeroC Private Ltd., the green molecule production arm of the India’s Greenko Group, New Delhi, on Feb. 7 announced the signing of a Memorandum of Understanding (MOU) and Heads of Terms for Uniper to enter into exclusive negotiations for the offtake of green ammonia from Phase 1 of Greenko ZeroC’s ammonia production facility in Kakinada, India.

Greenko and Uniper intend to negotiate a pricing, supply, and tenure structure for a supply and purchase agreement for 250,000 mt/y of green ammonia based on the Heads of Terms.

Greenko’s Kakinada project is a multi-phase green ammonia production and export facility adding up to 1 million mt/y of green ammonia production capacity by 2027. The first phase of Greenko’s facility will produce green ammonia based on an electrolyzer powered by Round the Clock (RTC) renewable electricity produced by 2.5 GW of renewable assets in India and reinforced by their Pinnapuram Integrated Renewable Energy Storage Plant (IRESP).

Greenko said the key differentiator that sets this project apart is the integration of a pumped storage plant to balance out the intermittent and seasonality of renewable production and achieve a high annual plant load factor upwards of 85%, allowing for flexible and dispatchable supply of green ammonia.

Uniper and Greenko also intend to collaborate on the deployment of similar flexible renewable electricity to other hydrogen products such as e-methanol and sustainable aviation fuels.

Greenko touts itself as India’s leading energy transition company, and reports installed capacity of 7.5 GW across solar, wind, and hydro assets spread over ~100+ projects across 15 states and delivers 20+ TWh of renewable energy annually, constituting ~1.5-2% of India’s total electricity consumption.

Uniper is already heavily involved with other green projects, including plans to collaborate on a joint study with Air Liquide, Chevron, and LyondellBasell that will evaluate and potentially advance the development of a hydrogen and ammonia production facility along the US Gulf Coast (GM Oct. 21, 2022).

Another project is with ConocoPhillips and JERA Americas Inc., a unit of Tokyo’s JERA Inc., a collaboration to facilitate the development of a US Gulf-based clean ammonia plant with initial production of 2 million mt/y, and expansion potential up to 8 million mt/y (GM Sept. 9, 2022).

Uniper has also signed a Memorandum of Understanding (MOU) to purchase 500,000 mt/y of green ammonia from EverWind Fuels Co., Halifax, Nova Scotia, a private developer of green hydrogen and ammonia (GM Aug. 26, 2022). The ammonia will come from EverWind’s production facility in Point Tupper, Nova Scotia, a multi-phase green hydrogen and ammonia production and export facility, which is in advanced stages of development and is expected to reach commercial operation in early 2025, the first in Atlantic Canada.

The German utility is also studying a green hydrogen project, H2Maasvlakte, at the Port of Rotterdam in the Netherlands, with the aim of making the port both a green hydrogen production point, as well as a major import hub (GM Oct. 14, 2022).

Uniper plans a German national hub for hydrogen in Wilhelmshaven, which will include an import terminal for green ammonia (GM April 16, 2021). Along with Dutch Vesta Terminals BV, Ulrecht, The Netherlands, it is evaluating the feasibility of refurbishing and expanding an existing storage facility at Vlissengen, the Netherlands, with the aim to create the first green ammonia hub, “Greenpoint Valley,” in Northwest Europe (GM Sept. 16, 2022).

Compass Shares Drop on Weaker Fert Outlook

Earnings, News, Southern Plains, Specialty, Sulfate of Potash

Shares of Compass Minerals fell as much as 16% on Feb. 8, the largest intraday drop since last May, after lowering its outlook for its Plant Nutrition segment and reporting weakening fertilizer demand. In addition, the company’s adjusted EBITDA of $61.8 million missed the Bloomberg Consensus, the average estimate from major Wall Street analysts, which was $74.6 million. Sales of $352.4 million missed analyst estimates of $378.5 million.

Compass now sees Plant Nutrition’s fiscal year 2023 revenue as $155-$225 million, down from the previous outlook of $200-$240 million. Segment EBITDA is now put at $30-$60 million, down from $55-$70 million.

Compass said the full-year outlook for the segment has declined and widened from its prior guidance range, reflecting lower full-year sales volumes than previously assumed based on year-to-date trends, heightened uncertainty regarding prices, and higher production costs. Sales volumes guidance is 205,000-270,000 st.

Fertilizer sales volumes for the first quarter ending Dec. 31, 2022, were off 46%, to 45,000 st from the year-ago 83,000 st, though prices were up 40% to average $924/st from $660/st. Revenues fell 24%, to $41.6 million from the year-ago $54.6 million.

For the volume decline, the company cited the recent drought conditions in California, its largest market for sulfate of potash (SOP), as well as grower expectations of lower future prices that caused many customers to rescind or defer normal levels of fertilizer purchases. This was followed by torrential rains and flooding in the second fiscal quarter that have created considerable uncertainty regarding whether application rates resembling historical levels will be realized this spring.

In addition, per-ton distribution costs increased 19%, reflecting increased fuel rates and fewer sales volumes to absorb fixed expenses. Operating costs increased 26% over the comparable quarter in the prior year, due primarily to the inflationary environment over the past twelve months. Production costs are anticipated to be higher as a result of increased natural gas prices at the company’s Ogden, Utah, facility driven by supply and demand dynamics in that geography.

Compass expects SOP production volumes at Ogden to be flat in fiscal 2023, as the 2022 evaporation season was impacted by less than favorable weather conditions. However, the company stressed that first-quarter sales volumes were driven by lower demand, not production challenges. “In fact, we were and continue to be prepared to service average customer demand, if and when it improves,” Compass President and CEO Kevin S. Crutchfield told analysts.

Despite the declines in volumes and revenues, Plant Nutrition still posted an increase in operating earnings at $11 million, up from the $9.5 million and EBITDA at $19.3 million versus $18.3 million.

“Compass Minerals is off to a mixed start in fiscal year 2023,” said Crutchfield. “While we saw improved results within our Salt business and made progress on our strategic priorities, weak demand in our Plant Nutrition segment and cost pressures are tempering our financial performance and outlook.” He added that consolidated sales revenue, operating earnings, and adjusted EBITDA for the quarter all increased year-over-year.

Compass reported a first-quarter net loss of $300,000 on sales of $352.4 million, down from the year-ago $2.4 million and $331.5 million, respectively. Operating earnings were up at $27.9 million from $20.4 million.

Compass touted adjusted EBITDA from continuing operations of $61.8 million versus the year-ago $58.4 million. However, if discontinued operations were included the year-ago figure was $67 million, reflecting a decrease for this year.

Compass reported progress on new products. It said Fortress North America, a next-generation fire-retardant company in which Compass has a 45% stake, announced that two of its aerial products have been added to the US Forest Service’s Qualified Product List.

In the lithium business, the company closed the gross $252 million strategic equity investment by Koch Minerals & Trading LLC, with $200 million of the proceeds expected to fund the first two years of phase-one lithium development, and the remaining proceeds used to pay down debt during the quarter.

As for the lithium brine source at the Ogden facility, Compass said it remains on track to complete the pre-feasibility engineering estimate by the end of fiscal 2023 second quarter.

Fertilizers Europe – Management Brief

Denmark, Europe, Management Briefs

Fertilizers Europe, the Brussels-based European producers’ organization, announced that Director-General Jacob Hansen is stepping down from the position and will leave at the end of this month.

Hansen, who is returning to his native country of Denmark, has held the position for 12 years and worked a total of 25 years in the agri-food sector in Brussels.

He said he intends to “use his extended experience of European Union and the institutions of Brussels, especially the European Parliament and the European Commission,” in Denmark.

AmmPower Corp. – Management Brief

Management Briefs

Clean technology developer AmmPower Corp. appointed Greg Barranger to the position of Vice President of its Independent Ammonia Making Machine™ (IAMM™) Division, effective Feb. 2, 2023. He was previously General Manager of the division and led his team to design AmmPower’s 4 mt/d, green ammonia IAMM™ unit.

“Mr. Barranger has done an outstanding job of bringing the IAMM™ Unit product to life,” said Dr. Gary Benninger, AmmPower CEO and Executive Chairman. “The IAMM™ concept of economical, distributed, green ammonia production is a major disruptor in the way ammonia is produced and transported.”

Millennial Potash Corp. – Management Brief

Africa, Management Briefs, Potash, Vancouver

Millennial Potash Corp., Vancouver, on Feb. 6announced that it has appointed Farhad Abasov as its Chairman of the Board to expedite the company’s efforts at its newly acquired Banio Potash Project in Gabon.

“Mr. Abasov joined the company as Director in 2020, and we are very pleased that he has accepted the position of Chairman of MLP,” said Graham Harris, Director. “Mr. Abasov has over 20 years of successful resource company management and project development arranging in excess of $500 million in project funding in the mining and energy sectors.

“[He] is coming off another successful exit as the President and CEO of Millennial Lithium Corp, which was acquired by Lithium Americas in early 2022 for $490 million. Mr. Abasov brings a wealth of potash experience to the company as the former President and CEO of Allana Potash Corp. and as a Co-Founder of Potash One,” Harris added. “This potash and corporate experience will be crucial in guiding the company’s efforts at its newly acquired Banio Potash Project, and we look forward to an accelerated successful program in 2023.”

Potash One was sold to K+S Group for $470 million.

MLP added that Abasov has extensive experience in the nuclear energy sector gained through his tenure as Senior Vice President at Energy Metals (acquired by Uranium One for $1.8 billion) and at Atomic Energy of Canada.

Bion Environmental Technologies Inc. – Management Brief

Management Briefs, Specialty

Bion Environmental Technologies Inc., a developer of advanced livestock waste treatment technology and premium sustainable beef, announced on Feb. 6 that Salvatore Zizza will join Bion’s Board of Directors, effective Feb. 15, 2023.

Bion said he brings decades of experience in institutional finance, commerce, and public company practices. In addition to serving as an independent Board member, he will help implement governance procedures, including establishing and chairing the Audit Committee and other committees, which will be set up during the next 30-60 days so that Bion meets the requirements of a listing on a national exchange.

Zizza is currently a Director of 19 funds in the Gabelli Asset Management and GAMCO Investors Inc. fund families, including several that trade on the NYSE. He serves as Chairman of Bergen Cove Realty Inc., with substantial holdings in residential real estate, and as Director and Chairman of Trans-Lux Corp., a provider of integrated multimedia systems for communications environments.

Zizza is a retired Chairman of BAM, an advanced material science company that provides carbonization, graphitization, pyrolysis, carbon vapor deposition, and other high-temperature processing services for semiconductor, aerospace, military, environmental, and other specialized applications. From 1985-1997, he was Chairman and CEO of the LVI Group Inc., an NYSE-listed firm. Zizza previously served Bion in a senior management role between 2005-2008.

Spolana Taps Nuberg EPC for Sulfuric Acid Modernization Project

Europe, India, News, News Briefs, Sulfuric Acid

Nuberg EPC, India, on Jan. 19 announced that it had been selected by Spolana s.r.o., Czech Republic, to deliver a 200,750 mt/y sulfuric acid project at the Spolana chemical manufacturing facility in Neratovice, Czech Republic. Spolana confirmed the selection on Jan. 26, adding that Nuberg would act in a full EPC capacity for the endeavor.

Spolana described the development as a modernization of the company’s sulfuric acid production capabilities, with the effort aimed at increasing field reliability and security while reducing the consumption of electricity and natural gas.

Nuberg will complete the project in three stages conducted over a three-year period. “The modernization will be performed on a step-by-step basis because it can take place only during planned production shutdowns,” said Spolana Authorized Director Piotr Kearney. “That is why we have split the project over three years.

“The crucial project parts include migrating steam production needed for the entire manufacturing process to the sulfuric acid unit, and installing more modern and thus more energy-efficient production equipment,” Kearney added.

Work is scheduled to begin in September, during a planned maintenance turnaround. Due to the project, upcoming maintenance shutdowns will run longer than usual, Spolana confirmed.

The plant will utilize Double Conversion Double Absorption (DCDA) technology, Nuberg said, in which SO2 and SO3 pass through absorption towers twice in order to produce a higher grade of sulfuric acid. The product will be used in both petrochemical and fertilizer-based applications, as well as in mining and industrial capacities.

Spolana is the Czech Republic’s only producer of PVC and caprolactam, according to the company’s website. The company also produces ammonium sulfate.

In recent years, Nuberg has been awarded EPC contracts for sulfuric acid projects in Egypt, Ethiopia, and India, chemical plant construction projects in Turkey, Uzbekistan, and India, and an NPK fertilizer plant in India, the company said.

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