$1.1 Billion Ammonia Plant in Works
By ALAN SAYRE 06.21.07, 3:50 PM ET
forbes.com
A company plans to build a $1.6 billion plant in southern Louisiana that would produce anhydrous ammonia and other products for manufacturing through the use of petroleum coke and high sulfur coal instead of natural gas.
Faustina Hydrogen Products LLC, a subsidiary of U.S. TransCarbon LLC, received preliminary approval Thursday from the State Bond Commission for about $1 billion in financing through Gulf Opportunity Zone bonds. Bonds and tax incentives were made available by Congress to cover areas hit by hurricanes Katrina and Rita.
The plant would be located next to Mosaic Fertilizer LLC's phosphate fertilizer manufacturing facility near Convent in St. James Parish.
Mosaic has agreed to purchase a large, undisclosed percentage of the ammonia output, along with all of the sulfur the plant will produce, Faustina said. The remainder of the ammonia will be sold to Agrium Inc., another major fertilizer producer.
The project will create about 1,400 construction jobs and, once manufacturing begins, 200 permanent positions paying an average of $75,000 annually, along with benefits, said Steve Goff, Faustina's manager for Louisiana operations.
The domestic manufacturing of ammonia has been stymied in recent years by skyrocketing prices for natural gas in the United States, giving major inroads to foreign producers who pay much less for the feedstock. Petroleum coke is a much-cheaper byproduct of the refining process.
"It's extremely significant," Goff said of the cost savings. "Our source of fuel is all domestic."
In addition to ammonia and sulfur, the plant will produce methanol and carbon dioxide. Faustina said it is completing long-term agreements with major chemical companies, which it did not disclose, to sell the methanol output.
The carbon dioxide, which will be industrial grade, will be used to recover oil stranded or left behind after traditional rig drilling in petroleum fields. Goff said the carbon dioxide would be sequestered with virtually none going into the atmosphere, thus limiting the "greenhouse gas" effect on the environment.
Petroleum producer Denbury Resources Inc. has agreed to purchase nearly all of the carbon dioxide, Faustina said.
The plant will produce 4,000 tons of ammonia, 450 tons of sulfur, 600 tons of methanol and 16,000 tons of carbon dioxide per day.
Goff said the company plans to apply for environmental permits in July and hopes to start construction in late 2007 or early 2008. Production should begin in 2010 following 28 months of construction, he said.
Announcement of the Faustina plant comes shortly after St. James Parish was considered for the site of a $3.7 billion steel plant that will employ 2,700 people. Following competitive bidding, ThyssenKrupp AG decided to build the plant in southern Alabama.
U.S. Transcarbon LLC is primarily owned by Green Rock Energy, LLC, a company formed by D.E. Shaw & Co. and Goldman, Sachs & Co. to invest in coal and petroleum coke gasification projects.
Copyright 2007 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed
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Louisiana Business Shorts: Major New Plant Announced
bayoubuzz.com
Major Plant
Faustina Hydrogen Products LLC, a subsidiary of U. S TransCarbon LLC, today announced plans to construct a $1.6 billion solid carbon gasification facility next to Mosaic Fertilizer, LLC’s phosphate manufacturing plant in St. James Parish, Louisiana.
The proposed facility would use petroleum coke and high sulfur coal as feedstocks to produce anhydrous ammonia for agriculture, methanol, sulfur and industrial grade carbon dioxide. The carbon dioxide will be sequestered and sold as an industrial feedstock and for enhanced recovery of “stranded” oil reserves in oil fields along the Gulf Coast.
The company will submit regulatory permit applications to the State of Louisiana in early July 2007, with construction expected to start immediately following receipt of appropriate permits and arrangement of debt financing. Faustina expects the 165-acre facility to be completed in 2010. Construction employment is estimated to peak at 1,400 workers, and once operational, the facility would employ 200 people.
“Ammonia is an important fertilizer for U. S. agriculture. Natural gas is a feedstock for ammonia, and the cost of natural gas has skyrocketed in recent years causing some companies to import lower- cost ammonia from abroad,” said John Kinnamon, Senior VP Development.
“We believe this new facility will revitalize domestic production of ammonia, which is vital to our food supply.”
In the months leading up to today’s announcement, Faustina Hydrogen Products has completed several engineering, design and supply agreements including:
In July 2006, Mosaic Fertilizer, LLC, a wholly-owned subsidiary of The Mosaic Company, signed a long-term ammonia purchasing agreement with Faustina Hydrogen Products to purchase a significant percentage of anhydrous ammonia produced by the facility. Mosaic also agreed to purchase all sulfur produced by the facility for use in its fertilizer operations.
Agrium, Inc. agreed to purchase the remaining production of anhydrous ammonia. Agrium is a leading global producer and marketer of agricultural nutrients, industrial products and specialty fertilizers, and a major retail supplier of agricultural products and services in both North and South America.
Faustina Hydrogen Products is near completing long-term agreements with major chemical companies to purchase the entire methanol output.
Denbury Resources Inc. has agreed to purchase nearly all the carbon dioxide, which will be used for enhanced recovery of oil stranded or left behind after traditional rig drilling, revitalizing old oil fields throughout south Louisiana and the Gulf Coast.
“Faustina Hydrogen Products is committed to environmental stewardship,” said Stephen Goff, Louisiana Operations Manager. “We made sound, reliable process systems and environmental protection key requirements in our front-end engineering and design work. Our goal is to operate this facility with a strong emphasis on low emissions, waste minimization and recycling. In fact, the facility will be the first of its kind in the United States to capture virtually all of its carbon dioxide emissions.”
U. S. TransCarbon LLC is primarily owned by Green Rock Energy, L.L.C., a company formed by the D.E. Shaw group and Goldman, Sachs & Co. to invest in coal and petcoke gasification projects that address demand for more environmentally friendly sources of energy production. |
