All Posts from October 8, 2021

Japan’s IHI Moves on Clean Ammonia

Ammonia, Japan, News, News Briefs

IHI Corp., Tokyo, which is spearheading the development of ammonia combustion technology, has announced three new initiatives so far this month. It plans to open an ammonia import terminal in Japan, start up a fuel ammonia project, and commence a feasibility study with two Malaysian partners.

IHI said it has begun developing a large ammonia receiving terminal to bolster ammonia and storage technologies and establish an infrastructure for imported ammonia. It hopes to complete the project by 2025. It has also begun developing large LNG-class ammonia storage tanks for the terminal.

IHI is one of Japan’s major LNG manufacturers. The company said it has engineered and constructed around a third of the nation’s LNG receiving terminals and half of its LNG storage tanks.

IHI has begun small-volume utilization of fuel ammonia at JERA’s Hekinan Thermal Station Unit 5. The purpose is to develop a co-firing burner to be used for large-volume (20 percent heating value) utilization at Unit 4. The project will run approximately four years to March 2025, and aims to achieve the 20 percent rate in fiscal 2024.

The Malaysian study runs through February 2022 and includes assessing technology for co-firing ammonia at coal power stations in Malaysia and evaluating technologies and economics across the entire supply chain, including to produce green ammonia from renewable energy sources and blue ammonia from natural gas.

Malaysian partners include PETRONAS Gas & New Energy Sdn. Bhd., a unit of Petroliam Nasional Bhd (PETRONAS), which is both an energy and an ammonia producer; and TNB Power Generation Sdn Bhd (TNB Genco), which owns and operates several power plants in Peninsular Malaysia. TNB is a wholly owned subsidiary of Tenaga Nasional Berhad (TNB), Malaysia’s biggest electricity utility.

IHI said Japan’s Ministry of Economy, Trade, and Industry (METI) has approved a grant for the Malaysian project under its program for feasibility studies on overseas deployment of high-quality infrastructure.

Anuvia, Novozymes Partner on Bio-Based Nutrients; Initial Focus on Phosphates

Florida, News, News Briefs, Specialty

Anuvia Plant Nutrients, Winter Garden, Fla., and biological solutions company Novozymes, Raleigh, N.C., announced on Oct. 5 that they have joined forces to develop a range of combined biotechnologies that will reduce the need for synthetic fertilizers in commercial agriculture. They said the resulting products could be available as soon as next year.

The parties expect their products to achieve equivalent or better crop performance than synthetic fertilizers and reduce environmental impact through lower nutrient loss and greenhouse gas emissions. They added that there will be no incremental cost to the grower, nor will they require changes to current farming practices.

“By pairing Anuvia’s sustainable products with Novozymes’ advanced biotechnologies, we are changing the paradigm of plant nutrition by making bio-nutrients a standard tool in commercial agriculture,” said Anuvia CEO Amy Yoder. “Through this partnership, we aim to double the nutritional value of Anuvia’s products without adding a single unit of synthetic nutrient or increasing the volume used.”

“Novozymes and Anuvia share a vision of providing innovative and sustainable solutions to farmers by using biologicals derived from naturally-occurring materials,” said Thomas Stenfeldt Batchelor, Novozymes’ Vice President for Agriculture Marketing & Strategy. “This partnership will allow for rapid development and deployment of advanced nutrient technology to promote sustainable and efficient commercial agriculture for the benefit of farmers, consumers and the environment.”

As a first step, the partnership will combine Novozymes’ phosphate solubilizing microbial solutions with Anuvia’s sustainable bio-based fertilizer products to enhance macro-nutrient efficiency with a focus on phosphate. The partnership envisions several generations of the new technology. The first generation is anticipated to add up to 10 units of phosphorous. Subsequent generations will target the replacement of additional units of macro and micronutrients, such as N, P, and K.

The companies will also work together to identify additional microbes and enzymes that could improve the nutritional efficiency and health of crops.

Anuvia already manufactures sustainable bio-based fertilizers for the agriculture, turf, and lawn care industries. The Mosaic Co., Tampa, licensed Anuvia’s technology for Susterra ™, its first bio-based phosphate product (GM Sept. 25, 2020).

Major St. Paul Terminal Expansion to Include 40,000 st Fertilizer Warehouse

Featured, News, Northern Plains

Germany-based Alter Logistics Company and Alter River Terminal, St. Paul, Minn., have started construction on a $24 million expansion at their Barge Channel Road facility in St. Paul. The project includes a new 40,000 st fertilizer warehouse, a stormwater retention installation, and an extensive rail track expansion, Alter said in a press release.

Alter’s current tenant, ADM Fertilizer of Minneapolis, Minn., will use the new warehouse under a long-term contract. The warehouse will have seven large storage bins for bulk products and three micro bins, plus a high-capacity blending/loadout system, according to company officials. The project is expected to be completed in 2022.

Marcus Construction of Willmar, Minn., designed the new building and is the primary and general contractor for the new facility. Alter has also partnered with Sackett-Waconia for mechanical system design and equipment, as well as the existing terminal upgrade.

The facility will receive product from a new 800 st/hour barge unloading system and a 400 st/hour rail unloading system, and will feature storage bays for macro products as well as micro bins for specialty products. The company said the new barge receiving system will feed both the new facility and Alter’s existing facility on the site. Railcars will also be able to discharge into either building.

The new building’s loadout equipment reportedly utilizes dual in-floor conditioner/drag conveyors feeding bucket elevators, which in turn feeds direct to trucks or rail. The facility also incorporates Sackett-Waconia’s high speed “Precision Blending” system, with 250 st of overhead storage.

Alter is also in the process of finalizing plans for an extensive addition to their rail service capacity with about 4,400 feet of new track at the site. The St. Paul Port Authority helped secure funding from the Minnesota Department of Transportation to assist in the project. TKDA Engineering, an engineering firm in St. Paul, has also been involved in all aspects of the project and is serving in a supervisory role for the new building construction.

According to its website, Alter Logistics operates facilities in Rock Island, Ill., and Davenport, Iowa, in addition to the St. Paul site. The company said it works with all major barge lines, trucking companies, heavy lift crane vendors, and container lines serving barge, truck, and rail modes of transportation at its intermodal terminals.

Earlier this year, Alter Logistics announced that it was planning a major investment in its St. Paul dock facility, which the company said would allow hundreds of additional barges to the site during shipping season.

Political Moderation in Peru Could Be Good News for Mosaic

News, News Briefs, Peru, Phosphate Rock, Tampa

Peru’s overseas bonds rallied the most in a year after President Pedro Castillo replaced a far-left prime minister with a more conventional choice in a bid to improve his administration’s relations with lawmakers and foreign investors, according to a Bloomberg report Oct. 7. Former Head of Congress Mirtha Vasquez was sworn in as Prime Minister, replacing Guido Bellido, a far-left member of Castillo’s left-leaning government who created turmoil last month by threatening to nationalize Peru’s biggest gas field.

President Castillo is keen on building a U.S. $800 million fertilizer plant in the country to help end the country’s dependence on imports. Negotiations with phosphate rock concessionaire Miski Mayo, which is controlled by The Mosaic Co., Tampa, will be central to those efforts, according to a recent report by BNAmericas. Mosaic did not respond to inquiries last week.

Investors are cheering signs that Castillo is seeking a conciliatory approach after the more radical members of his cabinet created fissures with conservative members of Congress and cast doubt on the country’s commitment to foreign investment, according to Bloomberg. Bellido’s exit marks the second high-profile departure from Castillo’s cabinet just a bit more than two months into his presidency as he signals a pragmatic, consensus-building approach in dealings with the energy sector and other industries critical to the economy.

“This is another affirmation of a more pragmatic approach to policy,” said Edwin Gutierrez, the Head of Emerging Market Sovereign Debt at Aberdeen Asset Management in London. For the time being, the cabinet reshuffle is a strong enough signal that Peru will remain a safe place to invest in Latin America, he added.

Castillo named six other new cabinet members, including ministers of mining, work, and interior. Finance Minister Pedro Francke, who is popular with investors, will stay on in the role.

“The changes seem designed to provide more tranquility to the markets,” said Jose Alejandro Godoy, a Professor of Social and Political Sciences at Pacifico University. “We will have a cabinet that engages in more debate, is more open to discussion, closer to a more moderate left.”

New Prime Minister Vasquez, 46, represents the Frente Amplio, or Broad Front coalition, which includes socialists, environmentalists, and center-left politicians

Castillo said the moves would improve “governability” adding that it was time to put Peru’s interests above ideology.

However, there is a risk that Castillo’s moves will rupture relations with his own socialist Peru Libre party, potentially imperiling his agenda in Congress. Waldemar Cerron, a Peru Libre congressman, described the new cabinet appointments as an act of treachery.

“Peru Libre members of Congress don’t support this cabinet, because we consider it to be a betrayal of all the majorities that have waited for many years to come to power,” he told reporters in Lima.

The Andersons Expands Feed Business with Purchase of Capstone Commodities

News, News Briefs

The Andersons Inc., Maumee, Ohio, announced on Oct. 1 that it has purchased Capstone Commodities LLC, Round Rock, Texas. Capstone specializes in providing feed ingredients to dairies and feed mills, feed yards, and exporters, predominantly within the southwestern U.S.

“We are excited to expand our feed ingredient portfolio and geographic footprint in the Southwest,” said Eric Watts, Vice President, The Andersons Trade and Processing. “As a trusted partner in the feed ingredient industry for many years, we are eager to offer greater options to our feed customers.”

The Andersons said the acquisition further supports its strategy to expand in its core grain and fertilizer businesses, including commodity merchandising, and its vision to become the most nimble and innovative North American ag supply chain company.

“Having worked with The Andersons for many years, I look forward to being part of the larger organization,” said Mike Rickert, Capstone President. “This team of employees, which is among the most skilled and experienced in the industry, has been critical to our success. The market knowledge of the expanded team provides tremendous value to our customers and opens up opportunity across the trade region. I look forward to a bright future with The Andersons.”

Capstone will continue under the Capstone name as a wholly-owned subsidiary of The Andersons.

Bion to Develop Demo Beef/Fertilizer Facility

News, News Briefs

Bion Environmental Technologies Inc., New York City, a developer of livestock waste treatment technology, recently announced that it has executed a lease for a site near Fair Oaks, Ind., where it will develop a sustainable and/or organic grain-finished beef production facility that will include its first third-generation waste treatment technology (3G Tech) platform at commercial scale, which will produce fertilizer.

The facility will be designed to feed approximately 300 head of beef cattle in state-of-the-art covered barns that can be re-configured to house swine when appropriate. Bion’s 3G-Tech system will be sized with the capacity to treat the waste from approximately 1,500 head – large enough to demonstrate engineering commercial scale, but small enough that it can be constructed and commissioned quickly. Bion anticipates startup sometime in the Spring of 2022.

Bion said the facility will demonstrate scalability and determine biogas and nitrogen recovery efficiencies at scale. The facility is anticipated to produce sufficient ammonium bicarbonate for both commercial testing by potential joint venture partners and university growth trials. The platform will generate operating data to support certification requirements for various private and regulatory agencies, such as USDA’s Process Verified Program (PVP) for a USDA-certified sustainable brand. The facility will also produce sustainable beef products – conventional and organic – for initial test-marketing efforts.

Yara, JERA, Idemitsu Ink MOU on Clean Ammonia Distribution, Bunkering

Europe, Japan, News, News Briefs

Yara International ASA, Oslo, Japanese power generation company JERA Co. Inc., and petroleum supplier Idemitsu Kosan, have signed a Memorandum of Understanding (MOU) to explore the establishment of a domestic clean ammonia distribution network and bunkering business.

JERA and Yara announced a collaboration to decarbonize power production in Japan in May 2021 (GM May 14, p. 1). They said expanding this collaboration to include Idemitsu Kosan brings an extensive distribution network for petroleum products, bunkering capabilities, and import terminals.

In late September, Yara signed an MOU with Japanese power generator Kyushu Electric Power Co. Inc. (Kyushu), to collaborate on establishing clean ammonia supply chains in Japan to reduce CO2 emission at Kyushu’s thermal power generation in Kyushu Area, Japan.

Maire Tecnimont, Greenfield Nitrogen Eye Green Ammonia Plant for Iowa

Europe, Featured, Green Ammonia, News, Western Cornbelt

Maire Tecnimont SpA, Milan, recently announced that its subsidiaries – NextChem, MET Development, and Stamicarbon – have reached an agreement with Greenfield Nitrogen LLC, Garner, Iowa, to develop the first dedicated green ammonia plant in the U.S. Midwest. The 240 mt/d, 83,000 mt/y plant and storage facility would be located near Garner, Iowa, and is expected to save over 166,000 mt/y of CO2 emissions.

“This partnership represents a collaboration of strengths,” said Linda Thrasher, Greenfield Nitrogen President. “As a development partner, Maire Tecnimont and its subsidiaries bring decades of expertise in successfully designing and executing nitrogen projects, as well as creating new technology, including state-of-the-art zero-carbon facilities. Greenfield’s development expertise, operational experience, and market knowledge align well and position both companies to play a critical role in meeting the world’s decarbonization goals.”

“We are intending to break ground in mid-2022,” Thrasher told Green Markets. “We are completing our feasibility study along with the final engineering with Maire Tecnimont and Stamicarbon. Simultaneously, we are securing financing.”

“Given the facility will be located in Iowa, we have access to abundant wind and solar,” she added. “Our site also has the ability to reach agriculture markets, the transportation sector, and industrial users.”

“Our Garner plant and storage facility will leverage both the abundant supply of renewable energy as well as the strong ammonia market,” she said. “What makes this project unique is that we have the ability to build an entirely zero carbon facility and not be encumbered with carbon intense legacy assets.”

“We are very pleased that Greenfield Nitrogen has chosen Maire Tecnimont as their partner of choice for this exciting project,” said Maire Tecnimont CEO Pierroberto Folgiero. “The combination of co-developer, technology provider, and EPC contractor makes Maire Tecnimont a unique player in the green ammonia market, an area that will be vital to industrialize the ongoing energy transition through green hydrogen. …Thanks to Greenfield Nitrogen’s experience and local presence, we expect this first project to pave the way for other green industrial initiatives to come.”

NextChem will start a feasibility study for the project, utilizing renewable energy as feedstock via the intermediate production of green hydrogen. MET Development will assist Greenfield Nitrogen in the development of the project. The companies said the plant will be designed utilizing the best available technologies for the green hydrogen production together with the ammonia technology that will be provided by Stamicarbon, which earlier this year launched its new STAMI Green Ammonia technology.

The project is the first of a series of green ammonia facilities that Greenfield Nitrogen is interested to strategically developing in the U.S. Cornbelt.

This is not Greenfield Nitrogen’s first proposal to build an ammonia plant. In 2018, Greenfield Nitrogen proposed a $220 million, 128,815/st ammonia plant for Garner, Iowa, that would serve a 100-mile radius (GM Feb. 23, 2018). The company sought funding from farmers, individual investors, and agricultural retailers.

Thrasher is a fertilizer industry veteran, having spent a seven-year stint (2004-2011) at The Mosaic Co., where she was Vice President, Public Affairs. She was also with Cargill Inc. for a ten-year span (1994-2004), where she served as Director, Public Policy. She holds a law degree from William Mitchell College of Law and is a native of northern Iowa.

OCI, ADNOC Proceed With Fertiglobe IPO

ADNOC - Abu Dhabi, Europe, Featured, News

OCI NV, Amsterdam, and Abu Dhabi National Oil Co. (ADNOC) and their Middle Eastern Fertiglobe plc joint venture said on Oct. 4 they intend to proceed with an initial public offering (IPO) of Fertiglobe and to list the jv’s shares on the Abu Dhabi Securities Exchange.

The companies plan to collectively offer 13.8 percent of Fertiglobe’s issued share capital in the offering. OCI said it intends to indirectly continue to own more than 50 percent of Fertiglobe’s share capital post-IPO, while Abu Dhabi state-owned ADNOC is expected to indirectly own at least 36.2 percent.

OCI, which is backed by Egyptian billionaire Nassef Sawiris, currently owns a 58 percent stake, while ADNOC has a 42 percent holding.

Fertiglobe could be valued at about $7 billion including debt, Bloomberg reported in April. That would make the share sale, expected to be completed this month, one of the largest in the emirate to date. The launch of Fertiglobe’s IPO follows the very recent and successful $1.1 billion IPO of ADNOC Drilling on the Abu Dhabi Securities Exchange.

OCI confirmed back in April that the company and ADNOC were considering a potential IPO of Fertiglobe (GM April 16, p. 1), and in early May said preparations had begun for the offering, following board approvals (GM May 7, p. 43). OCI, though, emphasized that market conditions would dictate whether the potential IPO would go ahead (GM Aug. 6, p. 36; Sept. 17, p. 28).

OCI sees the IPO as helping “crystallize” the value of Fertiglobe’s underlying business going forward.

“The IPO and listing will position Fertiglobe and will enhance its visibility as a pure play nitrogen company with a unique position to capitalize on new demand for low-carbon ammonia as a hydrogen carrier and clean fuel,” OCI said.

The IPO could benefit from the rebound in fertilizers prices, which have jumped in the past year as a rally in crop prices amid a broader commodities’ rally helped farmers boost purchases of the nutrient.

More recently, soaring natural gas prices in Europe have forced some fertilizer companies, including Yara International ASA, CF Industries Holdings, Borealis AG, and Lithuania’s Achema, among others, to curtail some ammonia output in recent weeks.

But Fertiglobe has locked in cheap gas supplies through long-term contracts, OCI CEO Ahmed El-Hoshy told Bloomberg in an interview this week.

Fertiglobe’s natural gas costs will probably average $2.8/mmBtu until the end of 2021, and roughly $3/mmBtu for 2022, with gas supply contracts ranging from seven to 23 years, according to the report, citing OCI statements

El-Hoshy believes gas prices “could stay quite elevated” as winter starts in the northern hemisphere, and that is enabling Fertiglobe to increase sales in Europe, Bloomberg reported.

Sultan Ahmed Al Jaber, ADNOC Managing Director and Group CEO, Fertiglobe Chairman, and also UAE Minister of Industry and Advanced Technology, said like OCI, ADNOC will remain “a long-term and committed major shareholder” in Fertiglobe and will continue to partner with the company on emerging opportunities, including the development of a new blue ammonia project at Ta’ziz in Ruwais (GM June 25, p. 33).

ADNOC is increasingly seeking to raise money from its assets and help the government fund efforts to diversify the economy.

Fertiglobe is the largest export-focused nitrogen fertilizer platform globally and the largest producer in the MENA region, with a production capacity of 5 million mt/y of urea and 1.5 million mt/y of merchant ammonia, according to OCI and ADNOC.

The jv was established by the two companies in September 2019, and combined ADNOC’s fertilizer business into OCI’s Middle East and North Africa (MENA) nitrogen fertilizer platform (GM Oct. 4, 2019).

Fertiglobe generated revenues of $1.55 billion in FY2020, and $1.26 billion in the first six months of 2021, according to OCI’s financial statements (GM Aug. 6, p. 30). The jv posted a FY2020 EBITDA of $461.1 million and $537.2 million in first-half 2021.

Fertiglobe said last month it was in process of closing a $1.1 billion bridge financing facility as part of a capital structure reset to refinance debt and pay dividends to OCI and ADNOC (GM Sept. 24, p. 31). It said it plans to pay at least $150 million in dividends for the second half of 2021 and is targeting at least $315 million of dividends for 2022.

Fertiglobe product sales volumes

‘000 mt 1H-2021 1H-2020 FY2020
Own product      
Ammonia 734 495 896
Urea 2,209 2,232 4,565
Total own product sold 2,943 2,726 5,460
       
Traded third party      
Ammonia 64 51 130
Urea 458 270 563
Total traded third-party products 522 322 693
Total own product and traded third party 3,465 3,048 6,154

Kalium Lakes Becomes Australia’s First SOP Producer

Australia, Featured, News, Specialty, Sulfate of Potash

Australian sulfate of potash (SOP) junior Kalium Lakes Ltd. has become the country’s first SOP producer, producing its first batch of SOP on Oct. 4 during the product commissioning process at its Beyondie SOP project located 160 km southeast of Newman, in Western Australia.

The Balcatta, Western Australia-based company said this first batch of standard grade SOP achieved “the required product specification,” and product commissioning will continue until Ebtec – a partnership between Germany’s K-UTEC, the process plant’s designers, and Ebner – completes its performance test.

Kalium said commercial production ramp-up to nameplate capacity of 90,000 mt/y remains on track to be achieved in March 2022, while the first granular SOP product is expected to be produced in December.

Meanwhile, the first SOP sales to Germany’s K+S Group are scheduled for later this quarter. The Australian junior has a binding 10-year offtake agreement for Beyondie SOP with K+S for the purchase of up to 90,000 mt/y (GM March 29, 2019).

All of the SOP fertilizer currently used in Australia is imported, and Germany’s K+S supplies around 60 percent of the import volume.

Beyondie SOP will be trucked to Perth for collection by end-users on Australia’s West Coast, or taken to port for distribution to the East Coast of Australia and New Zealand. Kalium said excess product will be shipped to South East Asian markets.

The SOP junior said the total project cost remains in line with the revised May 2020 capital expenditure budget of A$280 million (approximately US$181 million at current exchange rates), which includes construction of trenches, pumping stations, ponds, processing plant, gas power station, camp, airstrip, access road, and an 80 km gas pipeline.

Kalium expects to complete a planned expansion of Beyondie to 120,000 mt/y in September/October 2022, “to take advantage of strong SOP pricing,” and is understood to have agreed an expanded 100 percent take or pay offtake deal with K+S.

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