All Posts from March 19, 2021

Exmar Wins Classification Approval for Ammonia-Fueled Gas Carrier Plans

Ammonia, Europe, News, News Briefs

Belgium-based shipping company Exmar has secured “approval in principle” for an ammonia-fuelled gas carrier from U.K.-based classification society Lloyd’s Register (LR).

The ship will be a mid-size vessel with cargo capacity of 40,000 m3 and was designed by China’s Jiangnan Shipyard, while Norwegian industrial equipment supplier Wärtsilä Gas Solutions AS provided all input for the ammonia fuel gas supply system, Exmar said.

A risk assessment conducted confirming the risks arising from the use of ammonia fuel affecting persons onboard and the structural strength or the integrity of the ship were addressed in accordance with LR’s ShipRight Procedure for Risk-Based Designs (RBD). This included a Hazard Identification (HAZID) study, the shipping company said.

LR’s Global Head of Engineering Systems Ed Fort said the approval in principle was a significant milestone in progressing alternate fuels for shipping’s transition to zero-carbon, “proving the possibility of the use of ammonia as a fuel and how adaptable the fuel is to gas carriers, especially if carrying ammonia as cargo.”

This approval in principle is “an important milestone” in the process of developing low CO2 emission gas carriers, said Exmar’s Executive Director Shipping Jens Ismar.

“Exmar continues its steps towards further innovation and decarbonization by demonstrating the possibility of using ammonia as fuel onboard gas carriers,” Ismar said. “This follows our initiative of introducing LPG as a fuel in 2012, which is being implemented on our world’s first order of two dual fuel VLGCs currently under construction.”

Exmar operates a fleet of primarily mid-size carriers. Ammonia transportation accounts for around a third of the company’s business.

Afreximbank, OCP Ink $350 M Term Loan

Africa, Ammonia, Morocco, News, News Briefs, Nigeria

African Export-Import Bank (Afreximbank), the Cairo, Egypt-headquartered pan-African multilateral EXIM bank, has signed a seven-year $350 million term loan facility to provide financing to the OCP Group, the bank reported March 15.

Afreximbank said the facility will support the Moroccan group’s expansion plans across Africa.

OCP Africa, a wholly owned subsidiary of the OCP Group, and Nigeria earlier this month inked a number of agreements to advance their ammonia and fertilizer production project plans in the West African country (GM March 5, p. 1). The Moroccan group, via its African subsidiary, is also pursuing fertilizer production projects at various stages of development in Ethiopia and Ghana, as well as a number of fertilizer blending projects in the Sub-Saharan African region.

Australia’s Leigh Creek Gives FID Nod for Stage 1 Leigh Creek Energy Project

Australia, Featured, News, Urea

Adelaide-based Leigh Creek Energy (LCK) this week said its board had made the final investment decision (FID) to proceed with Stage 1 of its Leigh Creek Energy Project (LCEP) in South Australia, some 550 kilometres north of Adelaide, where it plans to establish a 1 million mt/y urea facility utilizing in-situ gasification (ISG) technologies (GM Jan. 22, p. 1).

The Stage 1 commercial development of the project, which overlays the Leigh Creek coalfield, will comprise drilling of up to five initial gasification wells to provide feedstock syngas and the construction of a 5 MW power plant.

The company recently completed the project pre-feasibility study, and has been awarded a petroleum production license by the South Australian government for the commercial production.

“The FID milestone gives us approval to construct everything we need in Stage 1 of our commercial development plan of the LCEP and start earning revenue,” said LCK Managing Director Phil Staveley. “The company can now move ahead and build on the EPCM contracts and commencement works [announced earlier this year] and commence placing orders with suppliers for long-lead items and specialty process equipment items.”

In January, LCK awarded the upstream engineering, procurement, construction, and management (EPCM) contract to manage drilling services for the development of initial gasification wells to provide feedstock syngas for the power plant to Brisbane-based InGauge Energy Pty Ltd. The Downstream EPCM contract for the selection, engineering, construction, and commissioning of the 5 MW gas-fired power plant went to Prudentia Process Consulting Pty Ltd., also based in Brisbane.

LCK said initial costs for the Stage 1 commercial development will be funded using the company’s existing cash balance and finance facility.

Negotiation of purchase agreements, seismic work, planning, drilling, and power plant installation are currently scheduled for the remainder of calendar year 2021.

The Adelaide-based company has put the cost of the LCEP at US$2.6 billion, and said updates on the progress of Stage 1 will be given throughout the year with a view to estimating a completion date once planning is further progressed.

LCK also sees the potential to increase urea production capacity at the site to 2 million mt/y, using its 1,153PJ 2P gas reserves.

Russia’s Ag Ministry Draws Up Draft Decree for Domestic Fertilizer Price Freeze

News, News Briefs, Russia

Russia’s Agriculture Ministry has drawn up a draft government decree that proposes the Ministry of Industry and Trade sign agreements with the country’s mineral fertilizer producers and suppliers in order to reduce and maintain prices for mineral fertilizers for domestic agricultural consumers, according to an Interfax report this week, citing the Ag ministry’s document.

The decree is proposed to enter into force from the day of its signing and will apply until July 1, 2021, to cover the spring sowing season.

Agriculture Minister Dmitry Patrushev earlier this month proposed a freezing of prices of the main domestic mineral fertilizer products for two-to-three months for the domestic spring sowing season (GM March 12, p. 12). According to the report, the move is prompted by price hikes for certain types of fertilizers, and are a growing concern for Russia’s farmers.

Russia’s Federal Antimonopoly Service (FAS) last month was prompted to initiate an investigation into the grounds for pricing of mineral fertilizers to the domestic market (GM March 5, p. 31; Feb. 26, p. 37). FAS is still to report on its findings.

However, the country’s mineral fertilizer producers believe the existing measures in place providing for a pricing methodology from the FAS for domestic mineral fertilizer pricing and the accessibility of fertilizers on the domestic market is sufficient, according to this week’s news report.

According to the Russian Association of Fertilizer Producers (RAFP), current mineral fertilizer prices for the domestic market are up to 20-30 percent below the export price.

Cofco Seeks Mergers, IPO; New Giant Would Compete with ABCD Quartet

China, Featured, News

Cofco Corp., China’s largest food company, plans to merge its international trading division with several domestic businesses to create a new agricultural commodity behemoth before embarking on an initial public offering, according to Bloomberg.

Cofco has hired bankers to advise on a plan to combine Cofco International Ltd. with some of its domestic trading and processing assets, according to sources familiar with the talks. After the merger, Cofco plans to sell shares in the new company – most likely in Shanghai, the people said, asking not to be named, as the matter is private. The IPO could value the new company at more than $5 billion, the sources said.

The combination will create a new agricultural trading giant, putting Cofco’s international trading unit and some of its domestic businesses under one umbrella, with assets spanning Brazil to China, according to the sources. The new company, which already has a significant presence in Latin America, particularly Brazil, will compete with the so-called ABCDs, a quartet of global traders that have dominated the industry for decades: Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc., and Louis Dreyfus Co.

China, the world’s largest buyer of commodities, has helped drive food prices higher over the past 12 months with record purchases of corn and other crops. The new trading colossus will help secure key food-supply chains and provide Beijing with another geopolitical tool in global commerce.

A spokesman for Cofco International in Geneva declined to comment. There was no immediate reply to an email sent to Cofco Corp.’s headquarters in Beijing.

The merger plan comes after Geneva-based Cofco International, also known as CIL, posted record profit on the back of volatile agricultural markets. The overseas trading venture had struggled for several years to make money, but in 2020 pretax profit surged to about $350 million, one source said. The results are unaudited and could still change.

The IPO will allow minority shareholders in CIL, including Chinese private equity investor Hopu, state-controlled China Investment Corp., Singaporean state investment agency Temasek, and a branch of the World Bank, to monetize their investment. Outside investors currently own about 49 percent of CIL, with Cofco controlling the rest.

The merger is expected to be completed this year, with the potential IPO possibly planned for the end of 2021 or early 2022, according to sources. Still, the merger structure has not been finalized, and the IPO plan depends on investor appetite and commodities prices, they said.

Investment bankers, including a bank from China, have been awarded a dual mandate to advise on the plan to merge the Cofco assets and then prepare the IPO, the sources said.

With the merger, Cofco will combine the market savvy of its international trading venture, which is one of the largest soybean exporters from South America, with its domestic assets that trade and process agricultural commodities in China. In effect, it will link farmers around the world directly with the biggest consumers in China. In addition, Cofco is involved in the fertilizer business in Brazil.

Cofco made a major splash back in 2014, paying more than $4 billion to buy the agricultural trading assets of Noble Group Ltd. and Dutch grain trader Nidera BV. However, the acquisitions soon caused major headaches for the Chinese company, saddling it with debt and financial losses related to the deals.

Acron Suspends Rare Earth Element Production

News, News Briefs, Russia

Acron Group, Moscow, said on March 15 it is suspending operations at its rare earth element (REE) unit at Veliky Novgorod in northwest Russia. It said the decision has been prompted by market conditions, with low REE prices and market volatility making production unprofitable.

The facility has production capacity of 200 mt/y of REE oxides and was launched in 2016 at a total cost of $50 million. Apatite concentrate from the group’s Oleniy Ruchey mine in the Murmansk region provided the feedstock base for the process (GM July 12, 2019). Acron said group specialists will close down the unit and preserve all equipment.

Brazil’s Port of Açu, Fortescue Eye Green Ammonia Project

Ammonia, Australia, Brazil, News, News Briefs

Brazil’s Port of Açu has signed a Memorandum of Understanding (MOU) with Fortescue Future Industries (FFI), a unit of iron ore major Fortescue, Perth, Australia, to develop hydrogen-based green industrial projects in Rio de Janeiro, Brazil. The MOU will allow the parties to conduct development studies into the feasibility of installing a green hydrogen plant at Port of Açu, Latin America’s largest privately owned deep-water port-industrial complex.

Subject to the outcome of the studies, the project envisages construction of a 300-MW-capacity green hydrogen plant at Port of Açu, with potential to produce 250,000 mt/y of green ammonia.

The availability of green hydrogen and renewable power is expected to drive further sustainable industrialization of the port, including production of green steel, fertilizers, chemicals, fuels, and other sustainably manufactured industrial products.

The MOU also lays the groundwork for onsite solar power development projects, as well as offshore wind development projects in the states of Rio de Janeiro and Espirito Santo, said Fortescue.

Port of Açu CEO Jose Firmo said the port is sailing steadfastly ahead toward the sustainable economy of the future. “This will be the first green hydrogen plant in the country and will place FFI and Açu at the forefront of clean energy production and the green industrialization of Brazil,” he said.

Port of Açu is managed by Porto do Açu Operacoes, a partnership between Prumo Logistica and the Port of Antwerp. Prumo is the multi-business economic group responsible for the strategic development of the port. Prumo is controlled by EIG, Washington, D.C.-based fund focused on energy and infrastructure, and by Mubadala Investment Co., Abu Dhabi, which invests in a variety of segments.

AES Mulls Green Ammonia in Chile

Ammonia, Chile, News, News Briefs

Power company AES Corp., Arlington, Va., said on March 3 that its Chilean-based unit AES Gener signed a Memorandum of Understanding in February with an established international hydrogen producer to conduct a feasibility study for the first large green hydrogen-based ammonia project in Chile. This project has the potential to require more than 800 MW of new renewable energy supply.

Alabama Halts Poultry-Based Fertilizer Application by Denali Water Solutions

News, News Briefs, South Central, Specialty

The Alabama Department of Environmental Management (ADEM), Montgomery, on March 10 issued a cease and desist order to Denali Water Solutions LLC, Russellville, Ark., a provider of waste conversion services, barring the company from resuming the application of poultry byproduct materials to land in north Jefferson County, north of Birmingham, for use as fertilizer. The ongoing ADEM investigation found the land application operations violated multiple regulations.

The order comes after ADEM requested that Denali cease operations on March 5 while it investigated complaints from residents about noxious smells and other environmental concerns from the operations, which included possible runoff into streams.

ADEM determined that Denali did not submit to ADEM an Operations Plan and a Nutrient Management Plan for the site prior to the beginning of operations as required by state rules. In addition, ADEM noted the company did not employ best practices in the handling of the byproduct material to minimize odor and protect human health and the environment.

Based on information received by ADEM, the method used by Denali was to spray the byproduct materials on the land surface, “which allowed odors associated with this material to be dispersed into the surrounding atmosphere unabated.” That method was in contradiction to the company’s plans, which stated “the residuals will be spliced into the ground at a depth of 6-12 inches.” ADEM found no evidence that any of the poultry byproducts contaminated nearby streams.

The order means Denali shall cease applying the material to the land until the company has approval from ADEM of a corrective plan that addresses the violations. The order is a preliminary enforcement action while ADEM continues its investigation and does not include penalties. ADEM pointed out that the enforcement action against Denali is a direct result of the Alabama Environmental Management Commission’s adoption last year of new regulations that now address the use of biosolids for fertilizer or other use.

Denali distributes such wastes at numerous locations throughout Alabama, mostly in the northern part of the state, according to AL.com, citing ADEM records that included a warning letter and two notices of violations for its sludge operations in Marshall, Lawrence and Colbert Counties.

Denali had not responded to inquiries at press time.

Denali Water Acquires Jesse Baro

News, News Briefs, Northeast, South Central, Specialty

Denali Water Solutions LLC, Russellville, Ark., a provider of waste conversion services, said March 9 that it acquired the assets of Jesse Baro Inc., a municipal and industrial environmental waste transportation company based in Douglassville, Pa., on Jan. 29, 2021.

Jesse Baro provides a complete range of environmental transportation and land application services for customers in both the private and public sectors, including transportation and land application of residuals for municipal and industrial wastewater treatment plants, water plants, incineration, and food processing facilities. It also provides services to the general construction industry by hauling bulk commodities, stone, compost, soils, and other materials, and managing the disposal needs of large and small contractors.

“The purchase of Jesse Baro, Inc. aligns with Denali’s geographic market diversification strategy,” said Jeffrey J. LeBlanc, Denali President. “This approach enhances our opportunities to deliver quality service and resources to existing and new customers while continuing to provide a safe and excellent workplace for employees. We are excited to have Steve Baro and his excellent team join Denali and look forward to maximizing the synergies between both entities in the Mid-Atlantic area.”

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