$1.7 billion nitrogen project considering Chinese partners
GRAND FORKS - The company planning to build a $1.7 billion nitrogen fertilizer plant near Grand Forks has reached a tentative agreement with a major Chinese engineering firm.
Northern Plains Nitrogen CEO Don Pottinger said his company has entered a nonbinding memorandum of understanding with Chengda Engineering Corp. to explore a relationship as an investor and provider of technology for a fertilizer plant to be built northwest of Grand Forks.
Pottinger said the Chinese government-owned Chengda is a significant engineering company with experience in the fertilizer industry and is looking for foreign projects.
The two companies signed the tentative agreement in Bismarck on Monday.
A group of Chengda officials was in Grand Forks on Tuesday to meet with local leaders, visit the proposed site of the facility and gather project information, according to Pottinger.
“They came over here to kick the tires and see if it made sense,” he said.
While there is no commitment to a partnership with Chengda, Pottinger said it was a strong possibility.
“When they sign something like that, they take that seriously,” he said. “They’re going to put their shoulder to the grindstone.”
Northern Plains Nitrogen grew out of plans started by the North Dakota Corn Growers Association to provide a large source of nitrogen fertilizer in the region and plant a stake in the industry.
In May, the group announced plans for the facility, which has a planned 2015-16 construction period and a 2017 start.
Northern Plains intends to finance the project with $1 billion in debt and $700 million in equity investment. It is soliciting farmers, farm groups and other investors to purchase a stake in the fertilizer plant.
It is looking to Chengda as a potential source of the “the lion’s share” of the debt financing, according to Pottinger.
“They bring far more than the average investor,” he said.
The nitrogen group began looking to Asia for financing early in their venture.
Pottinger said in May that board member and retired admiral Bill Owens, a former vice chairman of the Joint Chiefs of Staff and North Dakota native, would provide extensive contacts in Asia through his post-military business career.