All Posts from June 14, 2024

Nutrien Drops Geismar Clean Ammonia Project; Reviewing Strategic Options

Argentina, Clean Ammonia, Featured, Low-Carbon, Natural Gas, Nitrogen, U.S.

Nutrien Ltd. no longer plans to pursue the clean ammonia expansion of its Geismar, La., facility, Bloomberg reported, citing a June 12 Nutrien filing with the US Securities and Exchange Commission (SEC).

At its Investor Day on June 12, Nutrien President and CEO Ken Seitz said the company “paused work last year [on the Geismar expansion] in response to higher capital cost estimates and uncertainty over the pace of emerging demand for clean ammonia. Today, with a clear view to prioritizing our capital, we have made the decision to no longer pursue this project.”

The expansion was first announced in 2022 (GM May 20, 2022) and at the time the facility was expected to be the world’s largest clean ammonia production plant with expected volumes of 1.2 million mt/y. Nutrien said it would leverage low-cost natural gas, tidewater access to world markets, and high-quality carbon capture and sequestration to serve the growing demand in agriculture, industrial, and emerging energy markets.

Production at the facility was originally set to begin in 2027, but in August 2023 Nutrien suspended work on the project (GM Aug. 4, 2023) and last October the Louisiana Board of Commerce approved a delay in the commencement of operations from March 31, 2027, to March 31, 2030 (GM Oct. 27, 2023). At that time Nutrien said it had invested more than $100 million in the project.

Nutrien also indicated at its June 12 Investor Day that it is reviewing strategic options for its 50% ownership in Profertil in Argentina. Seitz said the company will be “laser-focused” on areas where it has the greatest competitive advantages, scale, and strategic fit.

“This includes enhancing our low-cost upstream fertilizer production assets in North America, growing our proprietary product capabilities, strengthening our global distribution network, and investing in our downstream core retail geographies,” Seitz said.

Bloomberg Intelligence Fertilizer Analyst Alexis Maxwell said Nutrien’s “strategic focus and capital now shifts to improving nitrogen reliability, energy efficiency, and upgraded product volumes. The company is targeting a 92-93% ammonia production rate in 2026, up from 88% achieved in 2023 and which could translate to up to 12 million tons of nitrogen in 2026, a 15% increase from 2023 nitrogen sales.”

Yara Opens Renewable Hydrogen/Ammonia Plant in Norway

Ammonia, Clean Ammonia, Europe, Featured, Hydrogen, Low-Carbon, Norway, The Netherlands

Yara International ASA on June 10 officially opened its renewable hydrogen plant at the Herøya Industrial Park in Porsgrunn, Norway, and said it is now producing renewable hydrogen and ammonia at the facility and has already delivered the first tons of fertilizer made from renewable ammonia produced at the plant.

The 24 MW renewable hydrogen plant was inaugurated by Norwegian Prime Minister Jonas Gahr Støre. Yara said the facility is the largest of its kind currently in operation in Europe, producing hydrogen with electrolysis of water and renewable energy, replacing natural gas as a feedstock and cutting 41,000 mt/y of CO2 emissions from the site.

“This is a major milestone for Yara and for the decarbonization of the food value chain, shipping fuel, and other energy intensive industries,” said Svein Tore Holsether, Yara President and CEO. “This is a groundbreaking project and a testament to our mission to responsibly feed the world and protect the planet.”

Holsether said the first tons of fertilizer from the plant were delivered to Northern European ag cooperative Lantmännen, based in Stockholm, Sweden. The two signed an agreement in 2022 (GM Jan. 14, 2022) and have been testing the commercial viability of green fertilizers since 2019 (GM Sept. 20, 2019). Yara inked a contract with Germany’s Linde Engineering in 2022 to construct the Herøya green hydrogen plant (GM Jan. 29, 2022).

Yara said the low-carbon fertilizers produced and delivered will be part of a new portfolio called Yara Climate Choice, which will also include fertilizers produced using carbon capture storage (CCS). Yara signed a CO2 transport and storage agreement with Northern Lights in 2023 (GM Nov. 22, 2023), which the company hailed as the world’s first cross-border CCS agreement.

“Renewable ammonia is an important part of the decarbonization puzzle, however developing it at scale takes time,” said Hans Olav Raen, CEO of Yara Clean Ammonia (YCA). “As the world is rapidly approaching 2030, we are also working to produce low-carbon ammonia with CCS to enable the hydrogen economy and develop the emerging markets for low-emission ammonia.”

Yara said it has already reduced emissions by 45% since 2005 across its production complex and aims to reduce CO2 emissions by 800,000 mt/y at its Yara Sluiskil facility in the Netherlands. The company is also evaluating world-scale low-carbon ammonia production projects with CCS in the US.

“The world needs to act urgently on multiple fronts to reach the goals of the Paris Agreement, and CCS is a critical steppingstone to decarbonize rapidly and profitably,” Holsether said. “The green transition will require investments, predictable framework conditions, massive build-out of renewable energy and grid, continuously advancing technology, and a maturing market where demand and supply are developed simultaneously.”

China Halts Urea Export Inspections; Global Prices Rise

China, DAP/MAP, Featured, Nitrogen, North Africa, Phosphate, South Korea, Urea

Fear of rising urea prices caused the Chinese government to shut down all urea Customs Inspection and Quarantine (CIQ) activities. The move caused urea prices in North Africa and the Arab Gulf to rise $20-$30/mt while the domestic Chinese price dropped by about the same amount.

The week opened with rumors that the inspections were being halted. Eventually sources reported their contacts at the various export facilities had received official notification that all inspections for urea exports were being halted. The move came just as traders were expected to see a gradual return of China to the export market.

Chinese exports of urea as reported by Trade Data Monitor showed only 31,000 mt exported in the first four months of the year, compared to 602,000 mt shipped during the same period in 2023. What shipments that have occurred are in small lots of 5,000-10,000 mt or less to South Korea and other Asian buyers.

The CIQ process was instituted by the Chinese government to limit exports of most fertilizers. In addition to the usual inspections related to the size and purity of the product, new rules required inspectors to also evaluate the impact exporting nitrogens and phosphates would have on the domestic price and domestic supplies. The government was seeking a way to ensure a plentiful supply of fertilizers for the domestic markets and, at the same time, keep prices down.

So far, the stoppage of urea inspections has not spilled over to the phosphate market. Domestic demand is not as strong for phosphates as it currently is for urea, which has allowed inspectors to clear phosphate exports for shipment, albeit in limited quantities. However, sources reported that DAP producers were called into a meeting with government officials and told to moderate price increases and export quantities or a similar ban will be imposed on their exports.

Exports of DAP and MAP for January-April this year were 850,000 mt against 1.6 million mt shipped during the same period of 2023, Trade Data Monitor reported.

Phosphorus Added to Canada’s Critical Minerals List

Canada, Featured, Low-Carbon, Potash

Natural Resources Canada announced on June 10 that it has updated the country’s critical minerals list to include phosphorus, which it said is essential for batteries and food security. The updated list also includes high-purity iron, used in green steel making and decarbonization, and silicon metal, required for semiconductors and computer chips.

The addition of phosphorus to the list follows a consultation period with provincial and territorial governments and industry and indigenous groups.

“By updating Canada’s critical minerals list, we are taking a proactive step to ensure that Canada’s efforts to seize the generational economic opportunity presented by our critical minerals wealth is well informed by the most accurate market trends, geopolitical factors and science,” said Jonathan Wilkinson, Minister of Energy and Natural Resources.

“Investments in critical minerals projects create good jobs for workers, more avenues for Canadian innovation, and lower emissions across the country, all of which form an important part of our plan to build a cleaner Canada and a prosperous, sustainable economy,” Wilkinson added.

Fertilizer Canada issued a statement on June 12 welcoming the addition of phosphorus to the list, which joins potash, noting that both minerals are important fertilizers.

“Canadian farmers rely on imported phosphorus fertilizer, while over 75 countries, including the United States, depend on sustainably and ethically sourced Canadian potash,” said Karen Proud, Fertilizer Canada President and CEO. “Their inclusion on the list underscores their significance to agriculture and food security on a global scale.”

To qualify as a critical mineral, the supply chain of the mineral must be threatened and there must be a reasonable chance of it being produced in Canada. In addition, the mineral must either be essential to the country’s economic or national security, required for the transition to a low-carbon economy, or position Canada as a sustainable and strategic partner in global supply chains.

First released in 2021, Canada’s critical minerals list identifies 34 minerals and metals deemed essential to the country’s economic and national security.

“As the Government of Canada progresses with the Canadian Critical Minerals Strategy, it is crucial to provide comprehensive support for all minerals listed, not only the prioritized ones,” Proud said. “This is especially important for minerals essential to food security. The government has an opportunity to work with industry to build on their investment in environmental progress, find long-term solutions in transportation, and continue to be a large economic driver and reliable trading partner.”

Pentagon Details Impact of Houthi Attacks on Global Trade

Africa, Featured, Israel, Saudi Arabia

Houthi attacks on commercial vessels in the Red Sea led to a 90% decline in container shipping through the area between December and February, Bloomberg reported, citing US intelligence officials who released their first formal assessment of the rebel campaign’s economic impact.

The attacks impacted at least 65 countries and forced roughly 29 major energy and shipping companies to alter routes, according to the rare public assessment by the Pentagon’s Defense Intelligence Agency. Alternate shipping routes around Africa added around 11,000 nautical miles to each journey, increasing fuel costs by approximately $1 million for each voyage. 

“Threats to Red Sea transits are compounding ongoing stress to global maritime shipping caused by interruptions at the Panama Canal due to drought,” the Defense Intelligence Agency said.

The attacks have impacted fertilizer shipments as well. In late November an Israeli-linked chemical tanker carrying a cargo of phosphoric acid was seized in the Gulf of Aden, but the Central Park was later released after the US warship Mason, with help from allied ships, quickly responded to a distress call from the ship (GM Dec. 1, 2023).

The Mosaic Co. reported in December that it had diverted a vessel from the Red Sea that was en route from Saudi Arabia to New Orleans (GM Dec. 22, 2023), and India noted in February that at least seven ships carrying fertilizer had been rerouted from the Red Sea (GM Feb. 9, p. 1). Also in February, the Rubymar sank after suffering missile strikes in the Red Sea while carrying some 21,000 mt of ammonium phosphate sulfate fertilizer (GM March 8, p. 1).

The US and the UK have launched repeated airstrikes on the Yemen-based Houthis in a bid to curtail their ability to target ships in the region, while also looking to block their revenue sources and impose other financial sanctions. So far, though, the group has been undeterred, and the economic fallout has only continued to widen.

The Houthis began launching the attacks last year to put pressure on Israel and its allies over the war in Gaza. On June 12 a commodities carrier called Tutor suffered severe flooding in its engine room following a successful attack from a seaborne drone during the current Houthi campaign. And a small cargo ship was on fire on June 13 after being hit by two projectiles. 

The Red Sea attacks have also impacted humanitarian relief efforts. Aid for Sudan and Yemen has been delayed by weeks as a result of longer routes around Africa, the report said.

Compass Minerals – Management Brief

Management Briefs, U.S.

Compass Minerals, Overland Park, Kan., on June 7 announced that Jeff Cathey has been named Chief Financial Officer (CFO), replacing Lorin Crenshaw, who left the company. Cathey will oversee all aspects of financial management for Compass, including accounting, reporting, tax, internal audit, treasury, financial planning and analysis, and investor relations.

Cathey joined Compass in December 2023 as Chief Accounting Officer and brings more than 15 years of financial experience in public and private companies. He previously spent 10 years at Crestwood Equity Partners LP and held roles at Shamrock Trading Corporation and Ernst & Young LLP. He received a BS degree in finance and accounting and a MS degree in accounting from Kansas State University, is a certified public accountant, and completed executive leadership training at Vanderbilt University.

“A key driver in our efforts to get back to the basics by creating value through our core Salt and Plant Nutrition businesses is rigorous balance sheet management. Jeff is a proven leader who has built and improved financial organizations and systems over his career,” said Edward C. Dowling Jr., Compass President and CEO. “I’m confident his leadership as CFO will help further our efforts to manage costs, reduce debt, and improve our overall financial performance.”

Ministry of Chemicals and Fertilizers – Management Brief

Management Briefs

Anupriya Patel was named the new Minister of State for India’s Ministry of Chemicals and Fertilizers. She will serve directly under Minister Jagat Prakash Nadda. Patel was named by Prime Minister Narendra Modi following his re-election in the national elections that just closed. She previously worked in the Commerce ministry and for parliamentary committees on petroleum and natural gas.

Australian Hydrogen Hub to Feed Orica AN Plant

Ammonium Nitrate, Australia, Clean Ammonia, Green Hydrogen, Grey Ammonia, Grey Hydrogen, Low-Carbon

The Hunter Valley Hydrogen Hub located in New South Wales, Australia, has been given planning permission from the state government. The hub, which is expected to cost $148 million, will use renewable electricity from Australian-based Origin Energy to produce green hydrogen using a 60 MW electrolyzer. 

Approximately 80% of the green hydrogen produced by the hub, or 12 mt/d, will be used by Australian mining company Orica at its ammonium nitrate plant on Kooragang Island. Orica has been producing grey ammonia from grey hydrogen at the plant, which makes fertilizers and explosives. Orica expects to reduce CO2 emissions by 52,000 mt/y with the switch to green hydrogen.

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