Magnida Magnolia Nitrogen Idaho came one step closer to building a $1.5 billion fertilizer plant in Power County last month when the Department of Environmental Quality issued an air permit for the proposed plant.
Magnida CEO Ric Sorbo said the DEQ received just four comments during a public hearing and the open comment period that followed. Those submissions voiced concern about possible odor emitted from the plant and dust during construction.
Sorbo said the estimated economic boost to Power County and Southeast Idaho could be close to $1 billion, according to studies conducted by the University of Idaho.
The plant will be built near the Lamb Weston potato processing plant and Sorbo said preliminary soil testing and assessment was also completed at the 550-acre site.
While activity at the Power County location has ceased for the year, Sorbo said a host of activity is taking place outside the state.
Two world class companies, KBR Construction and Bechtel Corporation, both based in Houston, Texas, are competing to build the fertilizer plant and Sorbo is expecting those bids to be in by the end of the summer.
Sorbo said for the remainder of the year, Magnida will be looking to secure financing for the project.
Magnida Magnolia Nitrogen Idaho will put up $500 to $600 million for the project and the rest of the project will be financed through banks. The company is meeting with financial organization worldwide and Sorbo expects to have financial closing by the end of the year.
“Everything is going exactly as it should be,” he said.
Sorbo said Magnida plans to announce the name of the bank within the next two months.
Part of the financing package will involve a marketing plan for fertilizer produced at the proposed plant.
“In order to loan, the banks must be assured that they will be paid back,” Sorbo said. “Part of that is showing a market for the product.”
In the U.S., 50 percent of the fertilizer used is imported from countries like China and Indonesia.
“That’s one of the reasons that this is such a great product,” Sorbo said. “We’re using an American product, natural gas, to produce fertilizer for American farmers.”
Sorbo said the Power County plant will not compete with the Simplot Company, which produces phosphate fertilizer at its Pocatello Don Plant.
The Power County plant will use natural gas as feed stock.
“It’s a different type of plant and a different product,” Sorbo said.
Infrastructure updates at the plant will include running gas and power to the site as well as upgrades to the rail system and roads.
Sorbo said construction at the site would secure 1,900 jobs over a three-year period, generating about $230 million annually.
Kristen Jensen with Great Rift Development said those jobs would create additional jobs and recent studies indicate that 4,000 Idahoans will benefit from construction of the plant.
When it’s complete, the fertilizer plant will employ 165 workers.
Jensen said a series of trade classes and training workshop are planned in Power County to prepare the local workforce for jobs during construction and at the plant.
“Jobs mean we can keep young people here after they graduate,” Jensen said.
A similar project was proposed in Power County in 2009, but Magnida’s fertilizer plant differs from that proposal, which was a coal fired plant.
“This plant will be smaller, cleaner, more efficient and less obtrusive,” Sorbo said. “Natural gas is not only cleaner than coal, it’s cheaper.”
Magnida Magnolia Nitrogen is conducting a traffic study to minimize the impact to residents and the company meets with residents monthly to update them about progress at the proposed plant. A website was created to keep them informed as well.
“We’re very happy with the progress we’ve made,” Sorbo said. “It’s a great time in the market and the banks don’t take on a project like this unless they know it’s going to be successful. I am very confident.”
Providing that Magnida is able to secure the financing it needs, construction could begin in second half of 2015 and the plant could start producing fertilizers within three years.
For more information about Magnida, go to www.magnida.com.