Northern Plains Nitrogen nears 10 years of planning and fundraising for proposed Grand Forks fertilizer plant

GRAND FORKS, N.D. — Nearly 10 years after Northern Plains Nitrogen developers proposed a $1.5 billion fertilizer production plant in northwest Grand Forks and a year after the company’s chief operating officer said construction could start within 2022 , the developers still have not reached their investment goal.

The most recent public action on the project was on Dec. 19, when the Grand Forks City Council extended its letter of intent for the provision of water, wastewater and stormwater services with NPN for another six months. Beyond the extension of the letter of intent, the city is waiting on NPN, said Todd Feland, Grand Forks city administrator.

“We’re still awaiting word from NPN that they’re going to move forward with further environmental completions and engineering, and when they do that, similar to what we’re doing with (proposed development projects) Fufeng and Epitome Energy, we will move forward with a development agreement with Northern Plains Nitrogen,” Feland said.

Larry Mackie, Northern Plains Nitrogen chief operating officer, announced in May 2013 that the fertilizer plant would be built on 320 acres in northwest Grand Forks adjacent to the city’s wastewater lagoons. Besides access to the “gray” water in the city lagoon, the site was chosen because of its access to a BNSF rail line, Interstate 29, U.S. Highway 2 and natural gas from a nearby pipeline.

Since then, the estimated cost of the Northern Plains Nitrogen plant has doubled to more than $3 billion.

Northern Plains Nitrogen developers’ plans for the project, which was met with enthusiasm from local, regional and state leaders, were to break ground in 2015 and that the plant would be in operation in 2017.

In 2014, the city signed a letter of intent with Northern Plains Nitrogen to serve the company with water-related issues, that include gray, potable and wastewater. The letter of intent since then has been renewed multiple times, most recently in a December City Council meeting, when members voted to extend the deadline until June 2023.

In January 2022, Mackie told the Grand Forks Herald that construction on a plant originally proposed in 2013 could begin as soon as 2022.

The prediction was prompted by a press release days earlier from Summit Carbon Solutions about its newly formed partnership with NPN. That reignited discussions about the project, which until that point had gone quiet while looking for investors.

A year later, Mackie says the financing on the project did not come through as expected, though recent talks with potential investors look promising.

“We have the permits that are required ready, we own the land, we’re shovel ready,” said Mackie. “We just need an investor, and we will get an investor because this project makes so much sense.”

Mackie, who spoke via Zoom at the Dec. 12 Grand Forks Committee of the Whole meeting, expressed his satisfaction with the Grand Forks location, reiterating that it was “good as it gets,” and that he is confident the project will secure investors.

“We’re just waiting for some dollars,” he said. “We’ve made a lot of progress in the last six months.”

Mackie declined to name a large potential investor, citing confidentiality concerns, but said the investor “is still very interested in our product.”

Feland acknowledged the Northern Plains Nitrogen project has long been in the works, but still believes that, if built, the plant will have significant positive impact for the farmers who will have access to the fertilizer and for the regional economy.

“The need and demand for fertilizer has only gone up,” during the past 10 years, Feland said, citing the reduction in fertilizer imports and commensurate increase in cost that have resulted from the Russia-Ukraine war.

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Besides the gray water that the city will provide to the plant, access to a natural gas supply is a critical piece of the project, Feland said.

City leaders and other stakeholders hope to convince legislators to provide financial incentives for a company to construct a high-pressure transmission pipeline to bring natural gas west to east across North Dakota.

Though the North Dakota Industrial Commission is offering $150 million to a company to build that pipeline, three rounds of bidding have yielded no applications for the project, which is estimated to cost $1 billion. After the grant was announced in November 2021 the deadline was extended twice because there were no applicants for the full project, to May 2022, then to Dec. 15, 2022.

The $150 million grant was approved by North Dakota lawmakers during a special session in November 2021, and includes $10 million designated to transport natural gas to Grand Forks County. Viking Gas Transmission applied for the $10 million portion, but that application remains under review.

In April 2022, WBI Energy Transmission wrote in a letter to North Dakota leaders that construction of the west-to-east pipeline was too costly because of the high project cost estimates, increased regulatory uncertainty and limited in-state demand potential, according to the Associated Press.

Funding for the proposed natural gas pipeline from the North Dakota Legislature during the 2023 session is key to the Northern Plains Nitrogen project, Feland believes.

“We’re still hopeful it can be done, and it would be a huge and significant investment in our community. We’ll keep working with the state of North Dakota and Northern Plains Nitrogen, and hopefully, progress can be made in the next six months,” he said.

NPN held a legislative briefing in Bismarck during the Legislature’s early December organizational session, which Grand Forks city leaders also attended, Feland said.

“The main discussion point with the legislators and also with the pipeline authority was to really encourage that extension of the natural gas pipeline from the Bakken to eastern North Dakota,” said Feland.

Keith Lund, president and CEO of the Grand Forks Region Economic Development Corporation, says NPN’s proposed plant would have a large appetite for natural gas and a large end user like NPN is needed to keep oil production in the Bakken at its current rates.

“I think there’s a growing recognition within leaders in the state that a large project like Northern Plains Nitrogen is essential to get pipeline companies interested in developing a pipeline to transport natural gas — you need to have a large end user to have sufficient demand,” said Lund.

Mackie concurs.

“The pipeline developer and NPN need each other — we need the pipeline for Bakken gas, and they need us as a baseload for the gas line,” said Mackie.

If the Bakken extension does not get built, NPN could rely on natural gas from western Canada carried by the Viking Gas Transmission pipeline, said Mackie.

As for when construction could start on the Northern Plains Nitrogen plant? This time, Mackie did not commit to a timeline.

“We could start this winter if we receive the funding that we expect, but I can’t promise,” he said. “You can’t count the money when it’s not in the bank, and we don’t have the money in the bank so my crystal ball is a little cloudy.”

The authors of this report are Ingrid Harbo, of the Grand Forks Herald, and Ann Bailey, of Agweek.