All Posts from September 2, 2022

AmmPower Completes Green Ammonia Prefeasibility Study for Porto Central Project

Brazil, Canada, Green Ammonia, News, News Briefs

Clean technology developer AmmPower, Toronto, announced on Aug. that it has competed a prefeasibility study for the green ammonia port facility at Porto Central, Brazil. As previously reported, AmmPower has a Memorandum of Understanding (MOU) (GM July 30, 2021) with Porto Central, a port location under development in Brazil with the objective to be a major green energy hub, to design, build, finance, maintain, and operate a 4,000 m/d green ammonia facility.

The company worked with an EPC (engineering, procurement, and construction) company to complete the pre-feasibility study for both a 4,000 mt/d and 2,000 mt/d green ammonia port facility design.

AmmPower anticipates that offshore wind will be the prime source of power for the green ammonia port facilities, as access to offshore wind connections via strategic coastal locations is prioritized among each project. The company believes that simultaneously developing the offshore wind farms and solar farms will help the facility be able to better maintain stable resource costs, creating a more effective business model and optimal market price.

The facility is designed to distribute domestic fertilizer for agricultural offtakers, transport hydrogen in the form of ammonia to major international offtakers via an Atlantic Ocean conduit, and support shipping companies by providing bunkering and jetty accessibility for fueling ships and loading fuel for transport.

The facility is expected to consist of fully integrated systems, including offshore wind energy and solar farm resources and partnerships with other industry experts, as well as a combination of proprietary technology specializing in ammonia synthesis, ammonia decomposition, and manufacturing efficiency. AmmPower believes integration of the full value-chain from early development will allow the company’s projects to successfully develop product with reduced costs for the facilities as well as clients and off-takers.

In addition to Porto Central, AmmPower earlier this year signed a Letter of Intent (LOI) to develop a green hydrogen/ammonia facility at the Port of South Louisiana (GM Feb. 4, p. 28). The facility, based on future feasibility studies, could produce up to 4,000 mt/d of green ammonia.

In the meantime, AmmPower expects to begin production of its IAMM™ units (Independent Ammonia Making Machine) in October at its plant in Novi, Mich. The small units only require water and electricity to operate and produce 4 mt/d of green ammonia. Their target markets are independent distributors and retailers of ammonia used as fertilizer. The company eyes first-quarter 2023 for first deliveries (GM May 20, p. 28). AmmPower earlier suggested a price tag of $3-$3.5 million.

Three Unions Reach Tentative Agreement with Railroads; Possible Strike Still Looms on Sept. 16

Featured, News, U.S.

Three unions representing 15,000 rail workers on Aug. 29 reached a tentative agreement with Class 1 railroads on a new contract that includes a 24% compounded increase to wages over a five-year term, which is retroactive to 2020. It also includes $5,000 total in bonuses to be paid out across the life of the contract, Bloomberg reported.

The workers represented by the three unions – the Transportation Communications Union/IAM (TCU/IAM), Brotherhood of Railway Carmen, and International Association of Machinists and Aerospace Workers (IAM) – account for just 13% of the total number of employees negotiating new collective bargaining agreements with the nation’s major railroads, however.

Nine other unions representing approximately 100,000 rail workers have yet to reach a new contract agreement, and are warning that a strike is possible if a deal is not reached by Sept. 16, the end of the latest 30-day “cooling off” period. The unions and the railroads have been trying to reach a contract for more than two years.

“It is critical for all stakeholders, including customers, employers, and the public, that all parties promptly resolve the negotiations and prevent service disruptions,” the National Carriers’ Conference Committee (NCCC), which is negotiating on behalf of the railroads, said. “Accordingly, we look forward to additional discussions with the unions that have not yet reached tentative agreements and will continue seeking voluntary agreements based on the [Presidential Emergency Board’s (PEB)] recommendations.”

The PEB was appointed by President Biden in July to avert a strike after earlier efforts by the National Mediation Board (NMB), an independent federal agency that mediates railroad and other labor agreements, failed to bring the two sides together on disagreements over wages, health care benefits, and scheduling (GM July 15, p. 1).

In an Aug. 16 report (GM Aug. 19, p. 28), the PEB recommended a 22% wage increase, along with $5,000 in service recognition bonus payments, over the five-year life of the contract, retroactive to Jan. 1, 2020. The recommended wage hike, which is the largest general wage increase for rail workers in nearly 40 years, is below the 28% increase that the unions sought, but above the railroads’ 16% proposed wage hike.

Railroad Workers United (RWU), an organization that represents rail workers across unions, released a survey this week of 3,162 workers that found nearly 95% support a strike after the cooling off period ends on Sept. 16, according to the trade publication Sourcing Journal

RWU said 93% of rail workers surveyed do not support the PEB package of recommendations, and declared “unequivocal opposition to any tentative agreement” that does not include “substantial add-ons” from what the PEB recommended.

The Fertilizer Institute (TFI) on Aug. 18 issued a statement thanking the PEB for “providing measured recommendations” on a pending contract agreement, and urged all parties to “swiftly reach a compromise and contract agreement.”

“Uncertainty of this nature is yet another disruption in an already complex environment for farmers, so speedy resolution is paramount,” said TFI President and CEO Corey Rosenbusch. “Over half of all fertilizer moves by rail year-round throughout the US, and the timeliness and reliability of fertilizer shipments is absolutely critical. If farmers do not receive fertilizer, it results in lower crop yields, higher food prices, and more inflation for consumers.”

Gensource Confident of Reaching Equity Financing Goals this Fall

News, News Briefs, Potash, Saskatchewan

Gensource Potash Corp. President and CEO Michael Ferguson told shareholders in an Aug. 31 call that the company is confident of reaching its equity financing goals this fall, which will allow the company to launch the Tugaske Project in Saskatchewan to construction.

The junior producer provided the update to shareholders after saying that turmoil in the global financial markets, exacerbated by Russia’s invasion of Ukraine, caused delays in completing the equity financing during the first half.

“With the significant improvement in potash price and an unprecedented visibility of potash and other fertilizers in the global press, there is increased interest for private equity in the fertilizer space and in the potash market particularly,” Ferguson told shareholders.

“The company is currently in detailed discussions with both domestic and international equity investors. These discussions have been constant over the past several months, but now with the heightened focus on potash as a truly strategic commodity, the discussions have now progressed to a serious negotiation level, well past a letter of intent (LOI) stage,” he continued.

“With the five largest players accounting for more than 75% of the market, and each of those five players relying on large and in many cases old producing assets, it only takes a problem at one asset to have a global impact,” said Ferguson, who noted three recent examples – flooding that closed Mosaic’s K1 and K2 mines, sanctions against Belarus, and the Russian invasion of Ukraine. He said the Russia situation puts a cloud over whether Russian potash producers can expand in the near term as planned.

“Russian and Belarusian product will find ways to get out to some markets and the situation will even out a bit, but the supply will remain constrained,” he added. “And we are of the view that the potash industry will never really return to its previous state.”

Ferguson noted that Helm AG, a future equity and offtake partner in the Tugaske Project, has worked shoulder-to-shoulder with Gensource to structure an equity solution that will complete the financing picture. He added that Helm has supported the project in significant ways by guaranteeing accounts included in the debt financing package, by providing short-term financial input to the company, and by investing further of their own resources and personnel, and has rolled up their sleeves and helped negotiate and complete the financing of the project.

Ferguson said plans announced in June to double the size of the Tugaske Project (GM June 24, p. 1), located 170 km south of Saskatoon, from 250,000 mt/y to 500,000 mt/y under a second phase of the project by adding a second module, continue.

Ferguson is upbeat despite the additional headwind of inflation. He also noted that a second phase of the project would only cost about 80% of the first phase, as infrastructure will already be in place.

Asked by a shareholder as to whether some of the delay has been due to technology, Ferguson reiterated that there is no issue on that front. He said it has had three or four independent technical reviews and has been reviewed by banks and equity investors. “And the results of every technical review is that the techniques used are robust…” he said.

Gensource shares closed at C$0.21 on Sept. 1, down 22% from the Aug. 30 close of C$0.27.

Seven Green MOUs Inked in Egypt

Egypt, Green Ammonia, Green Hydrogen, India, News, News Briefs, Saudi Arabia

The Suez Canal Economic Zone (SCZONE) on Aug. 25 announced the signing of seven Memoranda of Understanding (MOU) with respect to green hydrogen and ammonia production. The agreements were between SCZONE, The Sovereign Fund of Egypt (TSFE), The Egyptian Electricity Transmission Co. (EETC), The New and Renewable Energy Authority (NREA), and seven global companies and consortiums working in the field of new and renewable energy production.

“Signing MOUs with various international entities aimed to establish many facilities for the green fuel production to serve exporting purposes and ship bunkering service,” said SCZONE Chairman Waleid Gamal El-Dein. “The integration between the industrial zones and the affiliated ports gave SCZONE the competitive advantage that made it one of the most important global destinations and a regional hub for the green fuel industries.”

In providing information on the seven projects, SCZONE did not in all cases specify if production capacities were specifically for ammonia or hydrogen.

The MOU with the UK’s Globeleq is to establish a green fuel production plant in SCZONE on an area of 10 million square meters, with investments estimated at $11 billion and a production capacity of 2 million mt/y. Globeleq said on Aug. 29 that it will initially focus on green ammonia fertilizer production while considering other end uses for green hydrogen in the medium- and long-term.

Globeleq said Egypt’s unique geographical location as the crossroads of Africa, Europe, and Asia, with about 13% of the global trade flowing through the Suez Canal, puts the country in a position to become a global green energy hub.

Saudi Arabia’s Alfanar will establish a facility for green fuel production on an area of 4 million square meters, with investments estimated at $4 billion. Total ammonia capacity is expected to be 500,000 mt/y, with hydrogen at 100,000 mt/y, according to a report in Arab Finance.

UAE’s Alcazar will establish an industrial complex for green fuel production in Sokhna on an area of 37,000 square meters, with investments amounting to $2 billion and a total production capacity of 230,000 mt/y.

UAE’s K&K Global Co.’s MOU is to establish a plant to produce 230,000 mt/y of green hydrogen in Sokhna.

Under the Mediterranean Energy Partners (MEP) MOU, the company will invest $250 million to establish a plant for the production of green fuel, with a production capacity of 120,000 mt/y of green ammonia on an area of 100,000 square meters in the industrial zone in Sokhna.

India’s The Acme Group will establish a plant for green fuel production on an area of 4.5 million square meters in Sokhna, with investments of $13 billion, and total production capacity of 2.2 million mt/y.

An MOU with UK’s Actis is to establish an industrial complex for green fuel production from hydrogen and green ammonia, with $1.5 billion investments and a production capacity of 200,000 mt/y. The project will be located on an area of 2 million square meters in the industrial zone of Sokhna.

“European Gas Market is Bust,” Says Fertilizers Europe; Urges Urgent Crisis Management

Europe, Featured, Natural Gas, News

Fertilizers Europe, the Brussels-based European producers’ organization, warned on Aug. 26 that the European fertilizer industry is in a “full-fledged unprecedented crisis” because “the European gas market is bust,” with natural gas prices soaring over 1,000% from levels a year ago.

The industry body estimates that over 70% of European fertilizer production capacity has been curtailed or shut down as “record high prices of natural gas, which represent 90% of the industry’s variable production costs, makes it impossible for European producers to compete.”

At least six European nitrogen producers have announced initial or additional ammonia/and or nitrogen production cuts from Aug. 22 onward due to soaring natural gas and energy prices across the region. They include Yara International ASA, CF Fertilisers UK, Vienna-headquartered Borealis AG, Lithuania’s Achema AB, Hungary’s Nitrogénművek Zrt., and Poland’s Grupa Azoty and Anwil SA (GM Aug. 26, p. 1). Anwil early this week, however, announced it was resuming fertilizer production (see related story), while another – Slovakia’s Duslo – also suspended production (see related story).

With the cost of natural gas 8-10 times higher in Europe compared to the US and even more compared to other fertilizer industry hubs, the European producers are not able to compete on the domestic and global market, said Fertilizers Europe.

The industry body’s General Director Jacob Hansen warned that if the situation prevails, Fertilizers Europe fears that remaining producers could also be affected.

Fertilizer Europe is calling for “an urgent and decisive” European Union-driven crisis management action to restore fertilizer production.

It said this is key to secure the EU’s strategic autonomy for fertilizer and to ensure Europe’s long-term food security. It urges the European institutions and EU Member States to take immediate action to avert energy and fertilizer crisis.

“The current crisis begs for a swift and decisive action from EU and national policy makers for both the energy and fertilizer market. The gas market needs to be looked at to address today’s challenges, support domestic industry, and restore market confidence,” said Hansen.

“The policy makers should also seriously consider crisis management policies for fertilizer industry to minimize long-term repercussions for EU food security,” he said.

Hansen added “moving away from dependency on Russian energy and raw material supplies cannot be achieved by closing plants and moving jobs outside of Europe.

“An urgent correction of current gas policies is therefore needed to address this very serious crisis. Europe needs a strong domestic fertilizer industry to continue producing food and in the long run to develop Europe’s hydrogen economy using green ammonia supplied by fertilizer industry,” he continued.

Dutch TTF front-month gas (currently October), the European benchmark, this week eased back from the €339.195 a megawatt-hour (MWh) high hit on Aug. 26. That was close to the all-time high of €345 per MWh seen in early March, and came amid an impending three-day outage at the key Nord Stream 1 pipeline that supplies Russian gas to Europe via Germany.

Flows through the pipeline were suspended at 4:00 a.m. Moscow time on Aug. 31 for scheduled repairs at Nord Stream 1’s only operational gas compressor unit at the Portovaya compressor station, according to Russia’s Prime business news agency, citing Russian gas major Gazprom PJSC.

TTF’s front-month gas contract closed at €252 per MWh on Sept. 1, but this still compares to just €52.9 a MWh a year ago and just €20.3 on Jan. 4, 2021.

This week’s Dutch gas futures easing follows news mid-week that the EU has met its gas storage filling goal two months ahead of target.

But analysts have warned the bigger factor for the region’s energy security will be whether European countries can cut consumption enough to ensure that stored gas lasts through the coldest winter months, Bloomberg reported.

Full gas storage could sustain European countries for roughly three months at best, and stored gas in Germany could meet just 80-90 days of average demand, according to Oxford, UK-based Aurora Energy Research, as cited by Bloomberg.

Furthermore, concerns remain widespread that Russia may find another excuse to further reduce gas supplies to Europe.

But some are optimistic that Russia will not cut gas to Europe completely. Gazprom CEO Alexey Miller said in a statement on Aug. 31 that the state-run gas major expects this year’s revenues to exceed 2021 levels even as export volumes drop, Bloomberg reported.

In late-breaking news on Sept. 2, Russia’s Gazprom PJSC said its key gas pipeline to Europe would not reopen as planned, according to Bloomberg. The pipeline was due to reopen on Saturday after maintenance. But in a last-minute statement late on Friday, the company said a technical issue had been found and the pipe cannot operate again until it is repaired.

UK Fears CO2 Supply Shortages Amid CF’s Planned Billingham NH3 Production Halt

Ammonia, Carbon Dioxide, News, News Briefs, United Kingdom

The UK’s Department of Environment, Food, and Rural Affairs and food and drinks industry groups, such as the British Meat Processors Association, are urging the UK government to intervene – as it did in September last year – in the impending temporary halt to ammonia production at CF Fertilisers UK’s Billingham Complex in northeast England in order to safeguard the country’s CO2supplies.

CF’s Billingham plant has the capacity to produce 750 mt of CO2per day, with currently some 42% of the UK’s CO2 supplies coming from Billingham. CO2is vital for many of the country’s food processing and drinks sectors, as well as the UK’s hospitals and nuclear power industry, among others.

The company, a subsidiary of the US’s CF Industries Holdings Inc., on Aug. 24 announced its intention to temporarily halt ammonia production at the Billingham Complex due to market conditions (GM Aug. 26, p.1). CF said it is still to determine the exact date when it will begin the temporary shutdown of the ammonia plant. It intends to use the site’s ability to import ammonia to enable it to continue to run its ammonium nitrate and nitric acid plants.

However, once the ammonia plant is halted, CO2 production, which is a byproduct of the ammonia production process, will stop until the plant is restarted.

In September 2021, when CF halted production at Billingham and at its other UK plant, at Ince, Cheshire, due to soaring energy costs, the UK government agreed to an exceptional three-week arrangement that provided “limited financial support” to CF and allowed the Billingham plant to restart (GM Sept. 24, 2021), while the company and its CO2 customers worked on a revised pricing deal.

Since last year’s outage, CF has permanently closed the smaller Ince plant (GM June 10, p.1). CF Fertilisers’ two plants accounted for as much as 60% of the UK’s CO2 requirements.

While UK meat processing sources reported the country is in a much better position now regarding CO2supplies than they were a year ago, they have “serious concerns” that if CF follows through on its decision to temporarily halt ammonia production at Billingham, without sufficient supplies of the gas the country will potentially face an animal welfare issue with a growing number of animals unable to be sent for processing.

Bulgaria’s Agropolychim Resumes Full Capacity Production, Cuts Natgas Reliance

Ammonia, Eastern Europe, Natural Gas, News, News Briefs

Bulgarian fertilizer producer Agropolychim last month said it had resumed full capacity production after the completion of another stage of an investment program that has updated several of its production facilities and has helped it reduce natural gas consumption.

During the 50-day nitrogen production shutdown, the company said several major facilities at its production site near the northeastern town of Devnya were upgraded. One of the most important projects was the partial reconstruction of the nitric acid plant, where a new steam turbine was put into operation.

With the new equipment, internal steam consumption has been reduced by over 10%, which Agropolychim said will contribute to a further “significant” reduction in the company’s natural gas consumption. This comes in addition to the already operational steam plant using straw bales as fuel, it said.

Agropolychim in 2019 switched from ammonia production to imported ammonia after the commissioning of an ammonia import terminal, which it said made the company almost completely independent of the price of natural gas.

The company this year will increase the storage capacity of the ammonia terminal by 130%, from 10,000 mt currently to around 30,000 mt, at a cost of over €17million (approximately $17.05 million at current exchange rates).

Agropolychim said it currently imports ammonia from various suppliers in the Middle East, North Africa, and America, which in addition to its own production needs, also allows it to deliver ammonia and ammonia gas to various industries in Bulgaria and Romania.

Operating its fertilizer production facilities at full capacity will allow the company to meet the fertilizer needs of Bulgarian farmers and have for some export, it said.

The Bulgarian producer said it sells more than 1.3 million mt/y of fertilizers, of which it produces about 900,000 mt

According to data on its website, Agropolychim currently has production capacity for 400,000 mt/y of ammonium nitrate or 800,000 mt/y of UAN, as well as 300,000 mt/y of MAP/DAP production capacity or 330,000 mt/y for TSP. It also can produce about 300,000 mt/y of NPKs.

Agropolychim is a privately-owned company with Bulgarian and Belgium joint stock participation.

Fellow Bulgarian nitrogen fertilizer and NPK producer Neochim has reported a 250% increase in consolidated net profit to 75.6 million levs (approximately $38.8 million) for the first half of 2022, up from the year-ago 21.6 million levs, despite a 195% surge in raw materials expenses, according to a SeeNews report.

Neochim, which unlike Agropolychim uses natural gas as it main raw material, saw its expenses in the first-half surge to 327.3 million levs from 126.4 million levs the previous year, almost entirely from increased raw materials cost, according to the report.

Poland’s Anwil Back Up, Azoty Maintains CO2, Dry Ice Supply; Government Ensures Fert Access

Ammonia, Carbon Dioxide, Featured, News, Poland

Anwil SA, a unit of Poland’s biggest oil refiner, PKN Orlen SA, has restarted fertilizer production “despite difficult macroeconomic conditions” in order “to guarantee food security” in the country, the company said in an Aug. 29 company filing. Anwil had temporarily suspended fertilizer production on Aug. 23 due to the unprecedented increase of natural gas prices in Europe (GM Aug. 26, p. 1).

The Polish fertilizer producer said the price of its fertilizers once production resumes will reflect the current price of natural gas and market conditions.

Following Anwil’s fertilizer production halt and that of fellow fertilizer producer Grupa Azoty SA and two of Azoty’s subsidiary companies – Grupa Azoty Puławy, Grupa Azoty ZAK – on Aug. 22 amid soaring gas prices, Poland’s food sector warned the shortage of fertilizer production byproducts, including CO2, could put the country’s food security at risk as a number of food processing plants would be forced to suspend production.

Grupa Azoty said on Aug. 29 despite the temporary production cuts at three of the group’s companies, the group was continuing to provide CO2 supplies to its existing customers. Azoty said the reduction in fertilizer production was planned “so as to ensure the availability of sensitive products, including liquid CO2, dry ice, and aqua ammonia,” which it said was necessary for the operation of the commercial power industry.

In addition to CO2 inventories held in company storage facilities, Azoty said the group continues to produce and supply CO2 to its customers on an ongoing basis.

Poland’s Deputy Prime Minister, Minister of Agriculture, and Rural Development, Henryk Kowalczyk, on Aug. 29 said the country will ensure its farmers have access to fertilizers at “moderate” prices, according to a PAP news report. But he said these prices will not be at last year’s levels as “there is no going back to that level.”

Poland’s cabinet is working on a mechanism to shield the country’s farmers against the higher cost of fertilizers, Bloomberg reported on Aug. 30, citing Poland’s Prime Minister Mateusz Jakub Morawiecki, who was speaking at a press conference in Warsaw.

The Polish government is seeking measures that will not boost the profit of “foreign companies,” and “finding such solutions requires more time,” according to the report.

Slovakia’s Duslo Suspends Production

Eastern Europe, News, News Briefs

Slovakia’s trucking companies are reported to have started “panic-buying” AdBlue after the country’s nitrogen fertilizer and chemicals producer Duslo a.s. halted production in mid-August due to soaring natural gas prices.

Duslo, which is a unit of the Prague, Czech Republic-based Agrofert Group, operates one of Europe’s largest AdBlue plants. AdBlue is an essential additive for diesel trucks to reduce levels of nitrogen oxides (NOx) pollution from their engines.

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