ND: CHS Investing $1.4 Billion to Construct Nitrogen Fertilizer Plant | Trade and Industry Development

ND: CHS Investing $1.4 Billion to Construct Nitrogen Fertilizer Plant

Sep 17, 2012

Gov. Jack Dalrymple and leaders of CHS Inc., the nation's largest farmer-owned cooperative, announced that the company is taking steps toward constructing a nitrogen fertilizer plant in North Dakota at a cost of more than $1 billion. The plant would convert natural gas into fertilizers, providing the region's farmers with enhanced supplies of nutrients essential to raising corn and other crops.

CHS has selected a 200-acre site for the fertilizer plant near Spiritwood, N.D. Following further due diligence, necessary approvals and a successful engineering study, CHS would move forward on construction. CHS is conducting a preliminary engineering and design study to determine the feasibility of construction plans for the project, which is expected to cost between $1.1 billion and $1.4 billion. CHS is investing $10 million in the first phase of the feasibility study.

"This project is great news for our farmers and for the entire state of North Dakota," Dalrymple said. "The CHS fertilizer plant will provide our farmers with a reliable, long-term supply of locally produced fertilizers in place of imports from foreign countries. At the same time, the plant will create more North Dakota jobs and utilize locally produced natural gas. We will continue working to add value to our energy resources and to develop more agricultural inputs for North Dakota farmers."

Gov. Dalrymple and CHS President and CEO Carl Casale announced plans to build the fertilizer plant during a news conference held at the state capital in Bismarck. They were joined by Woody Barth, president of the North Dakota Farmers Union which has helped facilitate the project.

"By pursuing this project, CHS would be making a significant, strategic investment that ensures consistent, domestic nitrogen fertilizer supply for our farmer-owners," Casale said. "Today CHS imports fertilizer products from 19 countries. Developing additional domestic crop nutrients sources closer to our customers is critical to meeting demand, improving our logistical and distribution expertise, and adding value for the farmers who count on us."

"The ability to deliver a reliable supply of fertilizer products in North Dakota and the region is a win-win for family farmers and our farmer-owned cooperative system," Barth said. "We are pleased that our organization's initial market analysis and feasibility study for building a plant of this scope has allowed us to work closely with CHS, leading to today's announcement."

Preliminary plans call for building a plant that will produce 2,200 tons of ammonia fertilizer daily. It will be distributed as anhydrous ammonia, urea and UAN liquid fertilizer to farm supply retailers and farmers in the Dakotas and parts of Minnesota, Montana and Canada. The proposed plant will take advantage of abundant regional natural gas feedstock. It will employ between 100 and 150 people, with a tentative start-up in the second half of 2016.

Casale said CHS is in discussions with Great River Energy and the Jamestown Stutsman Development Corporation (JSDC), which together own the Spiritwood property, to formalize project agreements related to the land and services to be provided by Great River Energy and JSDC. CHS will continue working with Gov. Dalrymple's office, the North Dakota Department of Commerce, JSDC, Jamestown city officials, Stutsman County, North Dakota Farmers Union and Great River Energy to move the project forward. In addition, CHS has contracted with the engineering firms of CH2M Hill of Houston, Texas, and Kadmas, Lee and Jackson of Bismarck for on-site planning and related business and construction details.

CHS Inc. (www.chsinc.com) is a leading global agribusiness owned by farmers, ranchers and cooperatives across the United States. Diversified in energy, grains and foods, CHS is committed to helping its customers, farmer-owners and other stakeholders grow their businesses through its domestic and global operations. CHS, a Fortune 100 company, supplies energy, crop nutrients, grain marketing services, livestock feed, food and food ingredients, along with business solutions including insurance, financial and risk management services. The company operates petroleum refineries/pipelines and manufactures, markets and distributes Cenex® brand refined fuels, lubricants, propane and renewable energy products.

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