U.S. corn growers, fertilizer industry officials considering building US$1B plant in upper Midwest that could produce enough nitrogen fertilizer for nearly 12% of corn, wheat acres in the Dakotas, Minnesota

FARGO, North Dakota , July 5, 2012 () – Corn growers and fertilizer industry officials are considering building a $1 billion plant in the upper Midwest that could produce enough nitrogen fertilizer to feed about 12 per cent of the corn and wheat acres in the Dakotas and Minnesota.

Organizers have completed a feasibility study and are evaluating potential sites in the three states, according to the North Dakota Corn Growers Association. They also are doing business planning and will be setting up a structure that would enable farmers to invest, Executive Director Tom Lilja told The Forum newspaper.

A plant likely would be funded by farmers and private interests. Other options include investments from Canadian producers and farmers outside the tri-state area.

Officials began studying the project last year with help from the Department of Agribusiness and Applied Economics at North Dakota State University. Planners originally focused on a smaller plant but the feasibility study found the ideal size economically would be a $1 billion facility, Lilja said.

The plant could help local farmers secure fertilizer without having to rely on imports, and also use natural gas that is burned off as a byproduct of oil production in western North Dakota, Lilja said. About one-third of the natural gas produced in the oil patch is flared off because there isn't enough pipeline capacity to move it to market. Natural gas is a key component of nitrogen fertilizer.

"It solves a problem for the energy industry, and it solves a problem for the agricultural industry," Lilja said.

The plant would take three to four years to finish after construction starts, he said.

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