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North American Developers
Integrated EPC
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MAGAZINE | SEPTEMBER 2016
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CONTENTS03 Comment
05 Guest Comment
07 World News
14 Fertile Ground For ExpansionNitrogen fertilizer production is experiencing a renaissance in North America. Gordon Cope, World Fertilizer North America Correspondent, examines what the future may hold.
20 Weathering A Fertilizer StormLaura Cross, Integer Research, UK, illustrates the mixed fortunes of cyclical weakness in the nitrogen market: producer competitiveness and investment activity.
27 Synthesising SavingsAndreas Magnusson, Johnson Matthey, Sweden, and John Pach, Kate McFarlane and Darren Ward, Johnson Matthey, UK, explain how the manufacture of UFC-85 can aid the production of urea.
33 Excelling Into The FutureHenrik W. Rasmussen, Haldor Topsoe Inc., USA, details recent advancements in ammonia synthesis catalysts, heat exchange reformers and furnace management.
40 Then And NowBob Watson and Mark McGahey, Matrix PDM Engineering, USA, outline how the design and development of ammonia fertilizer plants has changed since the last big North American build.
46 Unsteady Waters For PhosphatesPhosphate markets are expected to come under pressure as new capacity starts up, supply begins to catch up with demand and prices weaken. Juan von Gernet and Chris Lawson, CRU Group, UK, report.
51 A New LookDoug Azwell, MECS Inc., USA, and Bob McKinney, El Dorado Chemical, USA, explain the updates conducted at El Dorado Chemical’s ammonium nitrate production plant that brought it in line with the latest EPA PM2.5 emission regulations.
59 A Little TLCCharles Thomas, Quest Integrity, New Zealand, explains how modern assessment technologies reveal the importance of maintaining ageing steam reformers.
65 Integrally GearedDr Christoph Jakiel and Christian Wacker, MAN Diesel & Turbo SE, Germany, outline the importance of tailor-made turbomachinery for cost-effective production, based on the example of integrally geared CO
2 compressors.
71 Taming The JungleEnrico Mangialardo, GE Oil & Gas, Italy, details a recent refurbishment of a urea plant to help develop agricultural independence in Mexico.
75 Increasing EfficiencyMax Shirazi, Gerry Vannuffelen and Jeremy Martin, Energy Recovery, USA, detail the application of the company’s turbocharger system in an amine loop for acid gas removal in gas processing.
84 A Breath Of Fresh AirGary Hilberg, Everest Sciences, USA, illustrates the significance of debottlenecking the air compressor in ammonia and nitric acid production.
89 Picture PerfectPaul Cannon, Microtrac, USA, details the use of online dynamic image analysis in optimising NPK production.
93 On TargetDr Michael Kamphus, Emerson, Germany, and Dr Ruth Lindley, Emerson, UK, explain the importance of process gas analysis for improving safety, managing emissions and meeting urea production targets.
98 Steps To Successful Fertilizer HandlingRebecca Long Pyper, Dome Technology, USA, outlines five considerations to use when planning for fertilizer handling that consequently enable long-term results.
103 A Precise ApproachCharles Formisani, The A.J. Sackett & Sons Co., USA, explains the crucial manufacturing techniques needed to produce effective fertilizer blends.
107 Plan Ahead For Dust ControlWilliam Cook, ArrMaz, USA, shares insights into the effective design and planning of dust control systems at fertilizer handling and storage facilities.
110 Evolving GranulationPascal Hervieu, Euragglo SAS, France, presents dry granulation of NPK fertilizers using compaction processes in comparison to other granulation processes and outlines recent developments in this area.
115 The Future Of Sustainability In FertilizersNick Reckinger and Carrie Carlson, FEECO International, USA, illustrate the environmental and economic advantages of biosolid and manure granulation for the fertilizer industry.
120 15 Facts ...This month we give you 15 facts on North America!
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COMMENTJAMES LITTLE, MANAGING EDITOR
SEPTEMBER 2016 | WORLD FERTILIZER | 3
Welcome to the first issue of World Fertilizer. This is a brand new magazine from the global business-to-business publisher,
Palladian Publications Ltd. World Fertilizer fits into our portfolio of titles alongside such established global brands as Hydrocarbon Engineering, World Pipelines and LNG Industry and its overlap with these existing magazines creates a powerful synergy for both our network of international readers and advertisers.
The genesis of any new magazine title is a complex process and is not without its share of blood, sweat and tears. However, I can honestly say that the journey toward this first issue has been
both fascinating and rewarding in equal measure and I am extremely grateful for all of the generous help and advice that has been offered to the World Fertilizer team along the way. Never before have I been involved in a new magazine launch that has elicited so much interest and enthusiastic support from the industry it seeks to serve before an issue has even gone to press. This hugely positive reception serves to highlight the industry’s genuine need and desire for a high-quality international technical publication covering the global fertilizer sector and we very much look forward to filling this void. To this end, I am delighted to announce that in 2017 we will be further demonstrating our firm commitment to this industry sector by producing six issues of World Fertilizer on a bimonthly basis. Please contact us for further information and for a copy of our Media Information; planning is already well underway for these upcoming issues and we anticipate receiving our ABC audit statement soon after this September issue has been published.
In tandem with this printed edition of the magazine, a digital version is also available as an App. Please visit www.worldfertilizer.com for information on how to both register to receive a regular printed copy of the magazine and to download the App. We also welcome your input via our social media channels and would encourage you to seek us out on Facebook, LinkedIn, Google+ and Twitter. No magazine should be published in a vacuum and we value your thoughts and feedback.
This inaugural issue sees a comprehensive line-up of in-depth technical articles on a range of topics from ammonia synthesis catalysts to improving performance with specialised turbomachinery technology, as well as insights into fertilizer blending, storage and handling. There is a regional report on the changing fortunes of the North American fertilizer sector and keynote articles from Integer Research providing analysis of the global nitrogen market and CRU Group on the outlook for the phosphate sector. I would like to thank all of our contributors for their input into the September issue and trust that you will enjoy this and future issues of World Fertilizer magazine.
And finally, next month sees the launch of the Global Fertilizer Day. This event marks the anniversary of Fritz Haber’s discovery of ammonia synthesis and seeks to raise awareness of the immense contribution that fertilizers have made and continue to make across the globe each and every day. World Fertilizer applauds this ambitious initiative by Fertilizers Europe. Please read the Guest Comment on p. 5 of this issue for further information.
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SEPTEMBER 2016 | WORLD FERTILIZER | 5
GUEST COMMENT
Fertilizers have changed the world. Now an integral part of our agriculture, they account for 50% of global food production. They have improved economic standards in
poverty-stricken areas around the world and keep billions of people fed every day. The world’s population has tripled over the past 50 years and will increase by 1 billion in the coming decade. How can we ensure that agricultural technology keeps pace with this to feed our growing world?
13 October 2016 marks the 108th anniversary of the Haber-Bosch patent for the ‘synthesis of ammonia from elements’, which helped create fertilizer from atmospheric nitrogen. This date will mark the first Global Fertilizer Day celebrating one of the most important inventions of our time that fed billions and set in motion some of the most important improvements in agriculture to date. Through locally organised events, this day will raise awareness of fertilizer around the world, marking the anniversary of an invention that is deemed one of the most important in history.
The purpose of Global Fertilizer Day is to unite the agriculture industry in observing the importance of innovation in agriculture and farming for a sustainable future. We call on all fertilizer manufacturers, users and distributors to educate the public about the importance of plant nutrients and on future agricultural implications for the world. Global Fertilizer Day will have a global reach because the invention of fertilizer is a global solution to food scarcity and one of the key contributing factors to the betterment of future agriculture.
The launch of Global Fertilizer Day will take place in London from 12 – 13 October, uniting some of the biggest thought leaders in the European agriculture and fertilizer industry. It encompasses two days of creative discussions on spreading awareness of fertilizers and innovation in agriculture. The more organisations that join globally, the bigger the impact of increasing awareness and public knowledge of fertilizers will be. Our cause is
fundamental for the future of the world’s food supply.
The European fertilizer industry has an annual turnover of €12.5 billion (US$13.9 billion) and is today the most energy efficient worldwide. Fertilizers Europe represents the interests of this manufacturing industry and aims to inform all in Europe about the crucial importance of mineral fertilizers.
When dealing with fertilizers, it is fundamental to ensure that the products meet the high quality the farmers need, while ensuring efficient use of resources in their production alongside taking care of environmental and safety concerns. These challenges are being tackled daily by the European industry and have over time led to the pan-European establishment of the Product Stewardship programme, which is the industry’s response to tackling these societal challenges. This is one of the most progressive ways in which we can ensure that the security and quality of our food is economically and environmentally sustainable.
The launch of Global Fertilizer Day invites all agriculture professionals to join in on making an impact on 13 October with an event contributing to the widespread knowledge of an essential invention and to bring together people for a discussion on the future of our food.
MARK CRYANS, HEAD OF COMMUNICATIONS, AND JANA GRASO, COMMUNICATIONS OFFICER, FERTILIZERS EUROPE
Leading-edge fertilizer technologies.To secure global food supplies, our engineers at thyssenkrupp Industrial Solutions have been developing leading-edge fertilizer technologies and large-scale plants for over 90 years. www.thyssenkrupp-industrial-solutions.com
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WORLD NEWS
SEPTEMBER 2016 | WORLD FERTILIZER | 7
RUSSIA Ammonia plant upgrade
The Russian fertilizer sector is in the process of modernising its existing production facilities to increase environmental
and economic sustainability. GE’s Power Services business has reported it will provide OJSC TogliattiAzot (ToAZ), one of the world’s largest ammonia production facilities, with parts to upgrade two GE industrial steam turbines at the company’s ammonia production facility in the city of Togliatti. GE will also supply spare turbine parts for three additional compressor trains and will help ToAZ reduce its operational costs by doubling the length of time between maintenance intervals.
“This large-scale modernisation programme for our ammonia production facility aims to increase the reliability and effectiveness of our equipment,” said Victor Kazachkov, Chief Operations Officer of OJSC TogliattiAzot, the plant’s managing company. “Upgrading ToAZ’s compression trains is a crucial step to help boost production capacity. As the original equipment supplier, GE is familiar with our operations and has the technology and domain expertise to provide a highly effective and reliable solution that can be implemented without affecting our existing workflow.”
EuroChem Group AG has acquired a controlling interest (50%+1 share) in Fertilizantes Tocantins, a leading fertilizer
distribution company in Brazil. The acquisition is in line with EuroChem’s strategy to strengthen its presence in the fast growing Latin American fertilizer market. With Fertilizantes Tocantins’ market expertise, blending facilities and established network of 2000 customers, the company believes the acquisition will strengthen its capabilities in the region.
The deal is subject to regulatory approval and was expected to be concluded by the end of August 2016.
Founded in 2003, Fertilizantes Tocantins is located in Brazil’s emerging fertile farming regions in the North, Northeast and Mid-West. It has delivered double digit sales growth for seven consecutive years, with fertilizer sales reaching 740 000 t in 2015.
Under the terms of the acquisition, José Eduardo Motta, Fertilizantes Tocantins’ owner, will retain a significant interest in the venture while continuing to serve as CEO overseeing operational management and the strategic growth of the business.
BRAZIL Fertilizer distribution acquisition
P rayon Technologies, the Prayon Group division specialising in the licensing of phosphoric acid processes,
will provide the licence and technical expertise for two new phosphoric acid plants due to be built in Egypt as part of the NCIC Ain Sokhna Fertilizer Complex on the Gulf of Suez. This will be the largest fertilizer complex ever built in Egypt.
The company’s scope of work comprises the provision of technical expertise, process engineering, support for detailed engineering, operator training, and support for
commissioning, start-up and performance tests. Studies are already under way and the plants are expected to be completed by 2018. Each plant will have a capacity of 600 tpd P
2O
5 (phosphoric acid).
Prayon Technologies will work together with its longstanding engineering partner Desmet Ballestra on this project. It will also deliver the required equipment, including tilting pan filters, reaction agitators, scrubbers and separators.
EGYPT Phosphoric acid plants licensing contract
SAUDI ARABIA Ammonia plant construction
Saudi Arabian Mining Co. (Maaden) has announced the completion of construction at the ammonia plant of its
subsidiary Maaden Waad Al Shamal Phosphate Co. (MWSPC), as well as the commencement of trial operations. During trial operations, the plant will gradually be ramped-up and it is expected that production will be variable.
The ammonia plant will have a production capacity of 1.1 million tpy.
Saudi Arabian Mining Co. (Maaden), the Mosaic Co. and Saudi Basic Industries Corp. (BASIC) own 60%, 25% and 15%, respectively, of the joint venture developing the Waad Al Shamal phosphate project.
WORLD NEWS
8 | WORLD FERTILIZER | SEPTEMBER 2016
ChinaHenan Jindadi Chemical Co. Ltd is to build a new 1800 tpd coal-based ammonia plant in Henan province, based upon Casale’s synthesis technology and proprietary equipment. Casale’s scope of work under the contract will compromise, besides line and process design, the supply of the ammonia converter cartridge and a synlop waste-heat boiler capable of producing 3.8 Mpa steam. The boiler will be directly flanged to the converter exit nozzle, helping to reduce costs and improve reliability.
SpainConcetti has recently supplied a big bag filling station for urea to a Spanish manufacturer of high-quality fertilizer materials. The installation fills up to 100 bulk bags of 500 kg/hr and can be operated by one person. With automatic height adjustment, it is possible to fill FIBCs up to 2000 mm in height and weighing between 500 – 2000 kg, enabling extremely flexible operations.
International GroGenesis Inc. has chosen United Agricultural Services Inc. (UAS) to provide blending, manufacturing and packaging services for the company’s flagship product, AgraBurst PRO™. In addition, UAS will supply logistical support services to include warehousing and shipping throughout North America, Central America, South America, Southeast Asia, Europe, the Middle East, Oceania and the Caribbean.
IN BRIEF
National Fertilizers Ltd has awarded Nuberg the EPFC and LSTK contract for the first public sector sulfur bentonite plant project
in India. This turnkey project plant will manufacture 25 000 tpy mix specialty chemical, sulfur bentonite.
Nuberg has won the turnkey project contract amid global competition. The EPC and LSTK company is to execute the specialty chemical project, from concept to commissioning. All heavy engineering equipments for the chemical plant will be fabricated and supplied from Nuberg’s state-of-the-art manufacturing facility in Gujarat.
The company’s EPC scope of work will include process expertise, license and technology, basic, FEED and detail engineering, fabrication, procurement and supply, construction and erection of all civil, mechanical, electrical and instrumentation works, installation, obtaining all necessary statutory approvals, testing, mechanical completion, pre-commissioning, commissioning, performance guarantee test run, including total project management and handing over the plant on single point responsibility basis.
INDIA Sulfur bentonite plant project contract
P otash Ridge Corp., a near-term producer of premium fertilizer in North America, has contracted SNC-Lavalin for the first phase of an
EPC programme for the Valleyfield fertilizer project, located in Valleyfield, Quebec.
The contract for the Valleyfield project comprises two distinct phases. The first phase is expected to be a four month process during which SNC-Lavalin will finalise engineering and process drawings, prepare equipment lists, schedule long lead items and award early vendor works contracts, such as the Mannheim furnace package, for a 40 000 tpy sulfate of potash facility, with the potential to increase the size of the facility to 80 000 tpy. The second phase of the project involves procurement and site works, which will occur shortly upon completion of the detailed engineering. The Valleyfield project is expected to be fully operational by late 2017.
The corporation is now focused on obtaining the required environmental and construction permits, entering into SOP off-take arrangements and raising the construction financing.
This contract follows another recently awarded development contract from Potash Ridge to SNC-Lavalin for its Blawn Mountain potash project located in Utah, US, to assess the plant design and capacity.
SNC-Lavalin will undertake a scaling study for the development of Blawn Mountain to assess the plant design and capacity, which is expected to take four months to complete. Once the scaling study is completed, SNC will have the exclusive option to execute the development of Blawn Mountain and will confer and negotiate the terms of a lump sum, fixed price EPC contract immediately upon completion of the scaling study.
CANADA First phase EPC of Valleyfield project
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WORLD NEWS
10 | WORLD FERTILIZER | SEPTEMBER 2016
RussiaIn January 2017, SCHADE Lagertechnik GmbH, an AUMUND Group company, will deliver two full-portal reclaimers, each with a capacity of 100 tph, a rail span of 44 m and weighing 144 t, to PhosAgro Cherepovets for its new plant extension for the production of potassium salt, ammonium sulfate and NPK in Russia. With this equipment, the very aggressive material can be reclaimed via two conveyor belts. As well as the machines, SCHADE is also supplying the engineering and expertise for the plant. A third full-portal reclaimer with a capacity of 400 tph and a rail span of 44 m has also been ordered and will be delivered in January 2017. This machine will be used in the 3 x 10 000 t NPK production facility.
ChinaIsrael Chemicals Ltd (ICL) has signed several contracts to supply an aggregate 700 000 t of potash to its customers in China. These are part of three-year framework agreements between ICL and its Chinese customers and are for delivery during 2016. The agreements also include options to purchase additional quantities.
InternationalGEA has delivered, installed and put into operation a two-stage gas cleaning system for a process line for the production of potash fertilizer. This process line belongs to a leading company in the world potash market. The gas cleaning system has a capacity to treat a gas volume flow of 135 000 Nm³/hr. To reduce the dust load and harmful ammonia from the dryer systems, a combination of dry filter and wet scrubber technology was applied.
Another gas cleaning system for a leading supplier of phosphate fertilizers is currently under construction. Altogether, 410 000 Nm³/hr is expected to be handled in four scrubber units each consisting of a high-efficiency Venturi scrubber and a column. GEA indicated that emissions of dust, HCl and HF will be treated down to very low values.
Toyo Engineering Corp. has been awarded a contract (worth approximately US$600 million) for a project for Chambal Fertilisers and Chemicals
Ltd (CFCL), a major private sector fertilizer producer in India, to construct a large-scale fertilizer complex in Kota, located in the Indian state of Rajasthan.
The complex will include an ammonia plant with a capacity of 2200 tpd and a urea plant with a capacity of 4000 tpd.
The ammonia production technologies of KBR and Toyo’s urea synthesis technology, ACES21, will be employed for this project.
The scope of the contract includes grant of license, engineering, procurement, construction and commissioning services.
Toyo-India has been independently awarded contracts for onshore engineering, procurement and construction works for the project.
This is the second project received from CFCL and the 15th fertilizer project that Toyo will construct in India since its first fertilizer project there in 1963.
INDIA New fertilizer complex in Kota
Crystal Peak Minerals Inc., a producer of premium specialty fertilizers, has awarded contracts to CH2M Engineers Inc., Norwest Corp. and Novopro
Projects to complete a feasibility study and technical report (FS or the report) in accordance with National Instrument 43-101 standards (NI 43-101) for its premium specialty fertilizer project on the Sevier Playa in southwestern Utah, (the Sevier Playa project).
The company has reported in a media release that findings from the fieldwork portion of the FS completed during 1Q16 confirmed or exceeded many technical metrics used to develop the company’s preliminary feasibility study (PFS) completed in 2013. Based upon meeting these technical markers, Crystal Peak’s Board of Directors approved going forward with the remaining phases of the FS and permitting process.
The FS will include early work to evaluate opportunities for project optimisation with the potential to significantly improve project economics. These options include evaluating associated minerals, optimising the mine plan and improving process design to defer capital costs and accelerate time-to-production.
CH2M will assume the role of lead FS consultant and will be responsible for coordinating the overall delivery of the FS. The report will build on the results of the PFS and on the FS fieldwork already completed. It is intended to further define the project to AACE Class 3 standards and to typical FS levels of confidence. The report will incorporate engineering design for all facets of the project required to reach a minimum mine life of 30 years and target production of 300 000 tpy of potassium sulfate, as well as the production of any associated minerals, such as lithium compounds, that may prove to be economic.
CH2M and Norwest will be responsible for the design, engineering and cost estimation of the Playa and infrastructure areas. Novopro will be responsible for evaporation pond and process plant design, engineering and cost estimation.
USA Contracts awarded for feasibility study for the Sevier Playa project
IN BRIEF
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DIARY DATESANNA Conference 2016
18 – 23 September 2016Eindhoven, Netherlands
www.an-na.org/2016-conference
TFI World Fertilizer Conference25 – 27 September 2016
San Diego, USAwww.tfi.org/conferences-events
North American Fertilizer Transportation Conference16 – 18 October 2016
Carlsbad, Scottsdale, USAwww.tfi.org/conferences-events
Africa Fertilizer Agribusiness 201610 – 12 October 2016
Dar Es Salaam, Tanzaniawww.crugroup.com/events/AfricaFertilizerconference
29th AFA International Fertilizer Technology Conference & Exhibition
11 – 13 OctoberTunis, Tunisa
www.afa.com.eg
IFA’s Crossroads Asia-Pacific Conference & IFA Production and International Trade Conference
25 – 27 October 2016Singapore
www.fertilizer.org/ifaevents
Sulphur 2016 International Conference & Exhibition7 – 10 November 2016
London, UKwww.crugroup.com/events/sulphur
Fertilizer Outlook and Technology Conference 15 – 17 November 2016
Ft. Lauderdale, USAwww.tfi.org/conferences-events
Asian Nitrogen & Syngas 201621 – 23 November 2016
Jakarta, Indonesiawww.crugroup.com/events/asian-nitrogen-syngas
Fertilizer Latin America25 – 27 January 2017
Buenos Aires, Argentinawww.crugroup.com/events/FLA
BRAZIL DANF project scoping study completed
An independent scoping study has been completed for Harvest Minerals Ltd’s Maximus Direct Application Natural Fertilizer (DANF)
project, which is part of the Arapua Fertilizer project and is located in the Brazilian state of Minas Gerais.
The study was conducted by consultants GE21 Consultoria Mineral (GE21) and includes pit optimisation and design, mine scheduling, CAPEX and OPEX estimates and a preliminary economic assessment based on the current initial resource, which represents only ~3% of the estimated mineralisation.
According to a London Stock Exchange release, the study reported potential production of 100 000 tpy for seven years, based on initial 883 000 t indicated JORC (2012) resource.
Subsequent to the completed study, the company’s wholly-owned Brazilian subsidiary Triunfo Fertilizantes and Mineração Ltda has signed a lease agreement (for an initial three years) with the owner of the land, which incorporates the current resource at Maximus. The agreement allows the company to carry out trial mining and associated activities on the property, once the trial mining permit has been awarded to the company.
INDIA Urea plant and business sale
Tata Chemicals is to sell its Babrala urea plant and distribution business in Uttar Pradesh to Yara International ASA for US$400 million on a
debt and cash free basis, including normalised net working capital.According to Yara, the plant has an annual production of
0.7 million tpy of ammonia and 1.2 million tpy of urea, and generated revenues and EBITDA of respectively US$350 million and US$35 million in the financial year ended 31 March 2016.
This will expand Yara’s growth in India and establish its “integrated position in the world’s second-largest fertilizer market. India has strong population growth and increasing living standards, and significant potential to improve agricultural productivity,” said Svein Tore Holsether, President and Chief Executive Officer of Yara. “We are impressed with the world-class operations we have seen in Babrala. The workforce is committed to high HESQ standards and has a solid safety track record. This well operated plant and its highly skilled employees will make an excellent addition to Yara’s global production system.”
According to a Tata Chemical press release, this sale is part of its divestment strategy, where it intends to strengthen its fertilizer businesses through partnerships and/or transfer of ownership to global experts. The company is focusing on pursing growth potentials and opportunities in its consumer business and inorganic chemicals business and focusing on the farm business through its subsidiary Rallis and Metahelix.
The agreement will be subject to regulatory approvals and sanctioning by the relevant courts in India, a process which is expected to take 9 – 12 months after which closing of the transaction can take place.
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FERTILE GROUND FOR EXPANSION
Nitrogen fertilizer production is experiencing a renaissance in North America. Gordon Cope, World Fertilizer North America Correspondent, examines what the future may hold.
14
FERTILE GROUND FOR EXPANSION
Crop fertilizers are making a comeback in North America, and none more so than nitrogen – with new ammonia production being added at a record clip.
“We are seeing an estimated 5 million short t of new capacity being added over the next five years,” according to Harry Vroomen, Vice President of The Fertilizer Institute (TFI). Some examples include:
n CF Industries’ new urea ammonia nitrate (UAN) plant, located at its Donaldsonville, Louisiana, nitrogen complex, which came onstream in late 2015. Total UAN capacity at Donaldsonville now stands at 4.2 million short t – up from 2.4 million short t. New urea and ammonia facilities in Port Neal, Iowa, are scheduled to enter production in mid-2016. In total, the company plans to spend US$1.2 billion to expand production capacity by 25%.
n LSB Industries’ 375 000 short tpy ammonia plant in El Dorado, Arkansas, entered production in early 2016. The output will be used to produce UAN, agricultural grade high-density ammonium nitrate (AN) and anhydrous ammonia.
n JR Simplot Co. is expanding its Rock Springs, Wyoming, fertilizer complex with the addition of a 220 000 short tpy ammonia plant. The plant, which is expected to come onstream in late 2016, will supply both phosphate fertilizer locations in Rock Springs and Pocatello, Idaho.
n Norway-based Yara has teamed up with Germany’s BASF to build an ammonia plant in Freeport, Texas. The US$600 million facility will be constructed on BASF’s Freeport complex. When completed in 2017, it will produce 750 000 tpy of ammonia.
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The renaissance comes after years of decline. “In 1999, the US was the second largest ammonia manufacturer, behind China,” said Vroomen. “Approximately 75% of total US supply was from domestic sources, and 25% imported. Between 1999 and 2007, however, the price of natural gas rose dramatically, significantly impacting the competitiveness of domestic producers. More than 40% of production capacity closed. By 2005, more than 55% of nitrogen was supplied by imports.”
Now, it is charging back. US ammonia production in 2015 was nearly 13 million short t – the highest level since 2002 – and nameplate capacity for ammonia production is 13.7 million short t. “The US is now the fourth largest ammonia manufacturer, behind China, Russia and India,” indicated Vroomen. “The US uses more than 20 million short tpy of nitrogen. Approximately 13.5 million short t are consumed by agriculture, 1.5 million short t is exported in products such as ammonia phosphate, and 5 – 6 million short t are for industrial use.”
According to Statistics Canada, the US’ northern neighbour produced 9.9 million t of nitrogen fertilizer in 2014 – 2015, primarily ammonia, urea and UAN. Domestic consumption amounted to 4.6 million t that same year, and almost 4 million t were shipped to the US (the remainder went into inventory or to other countries). Most of the country’s production capacity is situated in western Canada, near major wheat growing areas; about half of the production capacity is owned by Calgary-based Agrium. There have been few new facilities built or planned, and production has been relatively stable over the last five years.
New technologiesThe plants being built (and revamped) contain a whole new generation of technologies. Major nitrogen fertilizer equipment manufacturers include Houston-based KBR (which has been involved in the licensing, design, engineering and/or construction of more than 230 ammonia plants worldwide), Linde AG, based in Germany, and Haldor Topsoe Inc., headquartered in Denmark.
“Today’s ammonia plants are about 20% more energy-efficient than the older plants,” said Henrik Rasmussen, Vice President, Catalyst and Technology for Haldor Topsoe, North America. “Through continuous process improvement, it has been possible to reduce the energy consumption per tonne of produced ammonia tremendously over the past 30 – 40 years, to the point where it is getting close to the thermodynamic limit for making ammonia.”
Operators are using sophisticated innovations to optimise energy and production. For instance, additional exchange reformers can be installed adjacent to the main steam reformer to optimise the steam and energy balance and eliminate bottlenecks. The units are installed parallel to the main steam reformer to convert an additional amount of hydrocarbon feedstock into process gas, significantly increasing capacity.
Haldor Topsoe’s Exchange Reformer (HTER), for instance, has been installed in several ammonia and nitrogen plants. The company notes that up to 50% of the duty normally used for HP steam production in the waste heat boiler can be redirected for more efficient use in the reforming process. This technology can provide up to 25% additional reforming capacity using limited plot space.
Better maintenancePlants typically function best when operating at over 90% capacity, which requires high levels of maintenance and vigilance. Sophisticated monitoring systems are therefore being installed in critical components. “The steam reforming furnace is the last major part of the ammonia plant that is not currently monitored on a consistent and continuous basis,” said Rasmussen. “Monitoring the tube skin temperature is very important in order to ensure trouble-free operation.”
Traditionally, monitoring has been performed by having the operators open the view ports and manually measure the temperature using a hand-held, IR pyrometer, typically carried out once per shift. “The traditional way is not very safe for the operator and not reliable and repeatable,” explained Rasmussen. “The act of opening the view ports affects the furnace conditions, as it lets in cold air. Furthermore, the measured temperature is only one reading per point in time, which does not provide adequate data for a proper furnace optimisation.”
Advanced monitors are now being introduced. The Topsoe Furnace Manager is an image acquisition based system that monitors the tubes and the burners in the steam reforming units 24/7. The device takes a digital picture every second, which is then converted to tube temperatures and burner intensities. It is permanently mounted on the furnace wall and the images and the data are sent to a computer-based historian in the control room. The proprietary software provides easy access to all of the data in trends and plots to enable operators to easily balance the furnace firing and save energy. The system also provides alarm setting on any point in the furnace to ensure overheating does not occur.
Operators are always searching for ways to increase plant output and catalysts can play a key role. In 2014, Haldor Topsoe introduced a new, iron-based KM 111 catalyst for the ammonia converter. It is now used in a dozen plants across the world. According to the company, the catalyst provides higher conversion of the N2 and H2 into ammonia per pass in the converter. The additional activity can be used to produce more ammonia if the ammonia frontend is capable of generating the additional syngas. “If the frontend is limited, the additional activity will enable the plant to make the same amount of ammonia at a reduced loop pressure, resulting in significant energy savings,” explained Rasmussen. “In either case, KM 111 will significantly improve the profitability of any ammonia plant.”
While nitrogen fertilizer manufacturers have limited control over prices in the marketplace, they can and do strive to acheive
Figure 1. KM 111 iron-based catalyst (courtesy of Haldor Topsoe).
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lower operating costs whenever possible. Several years ago, Haldor Topsoe devised a new bottom support grid for the high and low temperature shift reactors with cost-savings in mind. “We have made a number of improvements and recently launched the 3rd generation patented bottom support grid, which is attached to the bottom elephant stool in the reactor in order to avoid any welding on the shell of these old existing reactors,” detailed Rasmussen.
The purpose of the bottom support grid is to reduce the pressure drop across the reactor. “We typically see a reduction in the order of 35 – 50%, depending on the current reactor design and plant rate,” said Rasmussen. “The synthesis gas is effectively directed through the outlet nozzle and by minimising the turbulence flow around the outlet nozzle, the pressure drop is reduced significantly. In a world-scale plant, a 1 psi pressure drop reduction may be valued at US$10 000/yr in compression energy savings, resulting in a very fast payback for the bottom support grid in the order of 6 – 8 months – even when including the installation cost.”
ChallengesMost major manufacturing sectors in North America operate in a complex regulatory and environmental regime; and nitrogen fertilizer production is no exception. “The regulatory climate in fertilizer manufacturing is very comprehensive, with OSHA, EPA, CWA and CAA governing their operations,” explained Kathy Mathers, Vice President of public affairs for TFI.
But nitrogen generally has less contentious issues when compared to other nutrient fertilizers. “Phosphate, for instance, is surface-mined and has stacked-waste products,” said Mathers. “Many of the mines are in Florida, where the mines are quite visible. Federal and state permits take time and effort to be issued.”
The new plants are much more eco-friendly. “When capacity was closed a decade ago, much of it was older, marginal plants,” added Mathers. “The new plants are state-of-the-art technologies with all the latest environmental controls. Producers are very diligent towards communities and federal and
state regulators, and there has been unprecedented interest from communities to have them sited nearby.”
While greenhouse gas (GHG) emissions are an issue with large-scale industries, such as the Oilsands in Canada, the fertilizer sector is on a much smaller scale and has a dispersed footprint. “As new capacity comes online, there will be more GHG emissions for the sector overall, but increased energy efficiency will mean that GHG emissions per tonne will decrease,” explained Mathers.
In order to lower carbon footprints, KBR offers highly advanced syngas purifying technology to ammonia producers. The purifier cryogenic syngas technology removes methane, argon and other impurities from synthesis gas by washing it with excess nitrogen. The system features low energy consumption, compact size and reduced CO2 and NOX emissions. Over two dozen units have been installed internationally.
Pollution from the application of nitrogen fertilizers is a major issue in farming communities. “Ammonia that isn’t absorbed by the plant can alter to nitrates and enter into surface and ground waters,” affirmed Mathers. “We are seeing increased R&D aimed at slow release and controlled release. The use of nitrification inhibitors, which are often used in parks and golf courses, is migrating to larger agricultural uses.”
In order to help address pollution issues, the US Department of Agriculture (USDA) instigated the 4R programme a decade ago. “It stands for Right source, Right rate, Right time and Right place,” said Mathers. “For the last five years, TFI has been supporting the programme. It focuses on the retailer and the farmer, supplying information for better nitrogen fertilizer stewardship. It is gaining widespread interest and adoption throughout many areas in the US. Several million dollars have been invested in promotion and research, but there is still much to be done. It only works if all four Rs are used; we would like to see a baseline measurement of 4R adoption in order to get a better handle on its effectiveness.”
Finally, the price of natural gas in North America has been a wildcard in the sector’s prospects for several decades, driving out production when prices are high, and luring it back when supply is plentiful and prices are low. But the nitrogen fertilizer is not the only sector piling onto the natural gas bandwagon; electrical utilities, petrochemical manufacturers and LNG exporters are all taking advantage of the gas glut (see sidebar). If prices head north again, profit margins will be squeezed.
And what of the market outlook? “Nutrient demand is very much related to food commodity prices,” stated TFI’s Vroomen. “Between 2009/2010 and 2012/2013, the price of corn went from US$3.35 to US$6.89/bu. This was a boon to farmers and they increased their nutrient applications. Nutrient prices rose as well.”
A high price attracts more production and, over the last three years, farmers have produced the largest US corn and soybean crops on record. “High supply has driven the crop prices down; USDA projections for the 2016/2017 corn crop shows prices in the US$3.05 – US$3.65 range,” noted Vroomen. “Now, the economics are not there for high nutrient application rates and fertilizer prices have come down.”1
Producers' point of viewNorth American manufacturers are cautiously optimistic regarding the nitrogen fertilizer market. J.R. Simplot Co., a
Figure 2. Thermal image of tube skin in steam reforming furnace (courtesy of Haldor Topsoe).
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privately-held agribusiness conglomerate based in Idaho, is confident that its new ammonia plant in Rock Springs, Wyoming, will boost its multi-nutrient fertilizer segment when it comes onstream. "Output from the new ammonia plant will significantly enhance our long-term sustainability in the phosphate marketplace," said Bill Whitacre, President and CEO. "This capital investment is a big step for us; one that is key to our future in ensuring long-term, low-cost raw materials to our facilities."
While Potash Corp. is primarily known for its potassium fertilizer production, the firm also produces over 8 million tpy of ammonia, primarily in the US. According to the Saskatoon, Saskatchewan-based company, its competitive advantages in the nitrogen sector includes its geographic proximity to market and being able to access cheap shale gas. “With energy feedstock costs accounting for the bulk of ammonia production costs, lower global energy prices have brought down nitrogen production costs in many regions, contributing to lower nitrogen prices,” it notes in its 2016 Market Overview. “Additionally, a stronger US dollar relative to other currencies has lowered both feedstock and other production costs in US dollar terms.”
During a 1Q16 investor’s conference, Chuck Magro, CEO of Agrium, highlighted current priorities for operators: keeping costs down and plants operating at maximum efficiency. “Our focus on cost management and reliability was a key contributor to the strengths of our nitrogen results as we achieved record ammonia production volumes this quarter,” he noted. “We also continued to benefit from our distinct regional cost advantage in natural gas, with an average first quarter AECO gas price of US$1.53 per million Btu representing a US$0.52 discount to NYMEX gas.”2
FutureThe sector is likely to see several trends emerge in the coming years. “The nitrogen market is quite competitive and, as US production continues to grow, you will see the least competitive imports squeezed out of the domestic market,” said Vroomen. “We expect to see the market return to approximately 75% domestic and 25% imported.”
Nutrient efficiency will increase. “Between 1980 and 2014, US corn production more than doubled, yet nutrient use on corn went up only 4.5%,” continued Vroomen. “The trend toward better nutrient efficiency has been going on for quite some time, but there’s still more room for higher efficiency. We are seeing technologies in which soil nutrients are sampled and converted into a field map that can then be loaded into software that tells machinery the amount and location of application. There are autonomous vehicles that can operate night and day. Fabulous technologies are becoming available.”
While international sources of nitrogen fertilizer will place strains on North American production, the continent remains a prime location for production. “The abundance of low-cost natural gas, well trained work force, stabile political climate and available financing makes North America the best place on earth to invest in an ammonia complex,” concluded Rasmussen.
Notes1. Statistics from the USDA indicate that nitrogen fertilizer prices have
decreased approximately 30% in the last three years.2. AECO is the Canada gas benchmark price, NYMEX is a major US gas
benchmark price.
Too good to last? Natural gas is the single largest component of both feedstock and operating expenses in the production of nitrogen fertilizer; its low price in North America is the key reason for the sector’s renaissance on the continent.
But, how long can low prices last? According to a recent study commissioned by the National Association of Manufacturers (NAM), demand for gas in the US is expected to grow by approximately 40%, or 30 billion ft3/d, in the next decade.
While production in the Lower 48 is running at a record 76 billion ft3/d, up from less than 50 billion ft3/d a decade ago, the US rig count has shed 1500 units since late 2014 and is hovering just above 400. In the meantime, everyone is jumping on the cheap gas bandwagon. In 2015, gas overtook coal as the primary source of fuel for electricity generation in the US. A decade ago, coal accounted for approximately 50% of all generation, but has since fallen to the point where it now stands at 33% and natural gas at 34%. And the trend is going to continue upwards. In the last two years, utility operators have shut over 17 000 MW of older coal plants as stringent new environmental rules make it uneconomic to upgrade them.
Several major LNG projects designed to export cheap gas to Asia and Europe have been moving ahead. For the last several years, Cheniere Energy has been building four liquefaction trains in the Sabine Pass region of Louisiana. Two trains, totalling 9 million tpy, have been completed and the first shipments recently left for Europe.
CFE, Mexico’s former electricity monopoly, is converting most of its bunker-fuel burning generators to natural gas. Exports from Texas are currently exceeding 3.5 billion ft3/d, and as a new network of pipelines extends ever deeper into the interior, Mexico’s gas demand is expected to almost triple.
Low natural gas prices have spurred ethylene and related plastics manufacturers to relocate to the US. According to the American Fuel and Petrochemicals Manufacturers association (AFPM), huge expansions are either underway or planned for the near future. “We have compiled a list of 264 new chemical industry projects due to the shale gas revolution,” said Melissa Hockstad, Vice President of Petrochemicals, for the AFPM. “They represent US$164 billion in capital investment. 40% of these have already been completed or are underway.”
When it is all added up, new demand amounts to tens of billions of ft3 per day. Fortunately, the outlook for new gas resources is excellent. The US Energy Information Administration (EIA) estimates that there is 1200 trillion ft3 of technically recoverable gas in the US and Canada, enough to meet North American needs for several centuries.
More importantly, that gas is readily available when needed. Recent advances in drilling and completions mean that shale wells can be drilled quickly with greater flow rates; in the last three years, the average initial production for Marcellus and Utica shale wells has risen from an average of 3.2 million ft3/d to 8.3 million ft3/d. While the NAM study did indeed predict a 40% increase in demand over the next decade, it also predicted an increase in supply of 48% for a total expected production of 112 billion ft3/d by 2026. And that means modest gas prices in North America for a long time.
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