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Dalrymple announces $1.2B fertilizer plant: Proposed project in Spiritwood to produce 2,200 tons of ammonia daily

JAMESTOWN - Plans for a $1.2 billion fertilizer manufacturing plant at the Spiritwood Energy Park Association industrial park in Spiritwood were announced by Gov. Jack Dalrymple and leaders of the nation's largest farmer-owned cooperative Wednesday.

The proposed Spiritwood Nitrogen Project by Cenex Harvest States (CHS) Inc. -- expected to be completed by the second half of 2016 -- would produce 2,200 tons of ammonia daily and supply anhydrous ammonia and other fertilizers to farm supply retailers and farmers in the Dakotas, as well as parts of Minnesota, Montana and Canada. Anhydrous ammonia, when applied to soil, helps provide increased yields of crops such as corn and wheat.

The $1.2 billion project -- which would cover 200 acres at the Spiritwood site -- is the largest in CHS history since being founded in 1931 as Farmers Union Central Exchange in St. Paul, Minn., and was an obvious choice, according to the company's president and CEO.

"The reason we've chosen this (Spiritwood) is quite simple," said Carl Casale, CHS president and CEO. "This proposal is for a win-win project that would allow CHS to take advantage of an abundance of natural gas in this region."

The plant would take natural gas and use it to produce ammonia through a chemical process.

According to a July study commissioned by the North Dakota State Pipeline Authority, natural gas production in the Williston Basin in western North Dakota could more than quadruple current levels and push the state into a leading supplier in the country's natural gas market. The study projected that North Dakota and Montana will produce 3.1 billion cubic feet of natural gas per day by 2025.

A victory for N.D.

The project is a significant victory for all of North Dakota, according to Dalrymple.

"Every day we're working hard to assure a better quality of life for all our citizens. This is the kind of project that will do just that," he said. "To the folks of Jamestown and Stutsman County -- a big congratulations. You've hit the big one."

The proposed plant at Spiritwood would be located about 10 miles east of Jamestown.

The next step in the process will be a $10 million front-end engineering and design study prior to finalizing construction plans.

Casale said there is no exact figure on how many construction jobs the project would bring, but said that once the plant is up and running, it would employ "north of 100 full-time employees." A company-provided news release estimated 100 to 150 employees would be hired for the plant.

The project will be funded primarily by cooperative-owner funding, with Casale saying that the company would also look into attracting other outside equity, including the possibility of pursuing some state or federal grant dollars.

As for what specifically drew CHS to the SEPA industrial park, Casale said it was a number of factors.

"Water, gas, electricity, rail and road -- that's what attracted us so much to Spiritwood. It's all there and readily available. That's what makes it such a nice location," he said.

CHS is a Fortune 100 company with a 2011 net income of more than $961 million. The company supplies energy, crop nutrients, grain marketing services, livestock feed, food and food ingredients. It also operates petroleum refineries/pipelines and manufactures, markets and distributes Cenex-brand refined fuels, lubricants, propane and renewable energy products.

The project would go a long way toward utilizing the state's natural gas surplus, according to North Dakota Farmers Union President Woody Barth.

"We expect the returns of this project to be significant. The ability to deliver a reliable supply of fertilizer right here in our state is a win-win for us," Barth said.

With the oil boom out in the western part of the state, there has been a compelling case for this kind of development for some time, Dalrymple said.

"When you have natural gas in one part of the state going for $2 per 1,000 cubic feet and you know that gas can be made at $800 per ton, then you know there's some potential for some profit to be made," he said.