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Company plans $1.2 billion project to make fertilizer at Spiritwood site

(Sun file photo / John M. Steiner) Plans were announced Wednesday for a $1.2 billion fertilizer plant at the Spiritwood Energy Park which would neighbor the Great River Energy and Cargill Malt plants as shown in this file aerial photo.1 / 2
Gov. Jack Dalrymple R-N.D.2 / 2

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

Local impact

In related news, the Jamestown/Stutsman Development Corp. Board of Directors learned Monday that the Renewable Fuel Standards for the Dakota Spirit AgEnergy Plant -- which would be part of the SEPA industrial park -- were approved by the Environmental Protection Agency and will now undergo a 30-day public comment period prior to moving forward with a projected December groundbreaking.

JSDC is currently working on legal agreements with Great River Energy as the next step in moving forward with the SEPA industrial park, according to JSDC CEO Connie Ova.

As a driver of the local economy, Ova said the agricultural component of Spiritwood Nitrogen Project presents a tremendous benefit to the community.

"We are overwhelmed with the magnitude of this project and excited about the economic impact to the area," she said.

Ova also said the impact of bringing in not only construction jobs but full-time careers once the project is completed would bring "years of possibilities to the state, region, county and local communities."

Beyond jobs, the Spiritwood Nitrogen Project will prove to be worth the investment in area infrastructure, according to Jamestown Mayor Katie Andersen.

"This is exactly what the investment in the infrastructure out at Spiritwood was designed to do by bringing in a highly productive and reputable company such as Cenex Harvest States," she said.

In regards to concerns about accommodating such a large-scale project in Stutsman County -- a county of about 22,000 residents -- Andersen said it's merely a small obstacle.

"When you think about all the tremendous benefits it will bring to the area not only immediately but down the road, it's small obstacles like housing accommodations and transportation infrastructure that we'll be concerned about but feel confident we'll be able to deal with," she said.

As for how much additional transportation would be taking place in the area as a direct result of the plant, that total will be known at a later date after pre-studies of the site are completed, according to Lani Jordan, communications director for CHS.

"As we look to moving product out of the area, rail will play a role and trucking will play a role. As to exactly how much, we will learn more through our pre-studies in the next few months once they are complete," she said.

Sun reporter Brian Willhide can be reached at 701-952-8454 or by email at