Dakota Gasification Co. (DGC) is moving ahead with engineering for a big boost in anhydrous ammonia production at its coal gasification plant near Beulah, N.D.
DC,C's Great Plains Synfuels Plant currently produces 160 MMcfd of gas and 25,500 tons/year of anhydrous ammonia from lignite.
With today's low prices for gas and high prices for anhydrous ammonia, DGC is poised to jump production of the fertilizer more than tenfold to about 300,000 tons/year, reducing gas production about 15%. The additional fertilizer would add an estimated $40 million/year to revenue.
Production of other chemicals is scheduled or possible.
A measure of low U.S. gas prices comes from Natural Gas Clearinghouse, Houston. Its latest report pegs Spot prices this month at $1.05/MMBTU at Opal, Wyo., down 900 from March a year ago.
Opal lies nearest Beulah among 18 U.S. sources the clearinghouse samples every month for spot gas prices. The price at Opal is consistently the lowest in the nation, mainly because of the region's lack of diversity of gas outlets and its long distance from markets.
By contrast, DGC's sale price for anhydrous ammonia has surged to a current $295/ton from $185/ton at this time last year. Fueling the advance is the chemical's growing use in fertilizers and other products.
Final approval for the 18 month anhydrous ammonia expansion hinges on action by the DGC board. A cost estimate awaits completion of engineering plans.
BROADER PRODUCT SLATE
Other products are in the offing as DGC seeks to broaden the Beulah plant's output. Its lignite feed during the past 12 months amounted to 6.2 million tons, or about 20% of North Dakota's production.
The plant would use about 15% of its additional anhydrous ammonia in a scrubber that is under construction. The scrubber, to be complete by March 1997, will extract ammonium sulfate from sulfur dioxide in the plant's main exhaust stack.
'We need to keep looking at ways to diversify if we are to make this plant viable," said DGC Vice Pres. Ken Janssen.
He pointed out that natural gas prices are forecast to remain low for the short term, well below DGC's cost to produce the fuel.
'The long term future of the synfuels plant will depend on finding other uses for its natural gas production," Janssen said. "We are considering the potential of producing methanol."
Also a possibility is production of carbon dioxide for use in enhanced oil recovery projects in the surrounding Williston basin.
Settlement of a lawsuit last spring gave DGC time to consider such opportunities. The lawsuit, settled among DGC, the U.S. Department of Energy, and four gas pipelines, centered on a dispute over purchases of the plant's gas by the pipelines (OGJ, Apr. 18, 1994, p. 35).
DGC earned about $20 million last year from sales of products such as phenol, cresylic acid, anhydrous ammonia, nitrogen, naphtha, and krypton-xenon. DGC is a subsidiary of Basin Electric Power Cooperative, a regional power generation and transmission cooperative. Both have their headquarters in Bismarck, N.D.
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