February 29, 2012

BioNitrogen to build first urea plant in Texas

BioNitrogen Corp announced Tuesday (Feb 28) that it has acquired a 49-acre parcel of land to build its first urea plant in Lubbock, Texas, US.

The company expects to complete the land purchase after concluding an Environmental Site Assessment. It has already engaged X8 Engineering who anticipates completion of the ESA no later than March 12, 2012.

BioNitrogen expects to begin construction of the plant after evaluating, obtaining and finalising its financing and engineering options for the construction and commissioning, which it expects to complete in the coming weeks. The company anticipates that the total cost to construct the plant will be approximately US$65 million.

The company's innovative, patent-pending technologies transform residual agricultural waste and other biomass materials into high-quality bulk urea (a white, crystalline solid containing 46% nitrogen), which are principally used in the agricultural industry as a crop fertiliser, and sold to both agricultural wholesalers and retailers.

The modular plant has a design capacity capable of manufacturing up to 15 tonnes of urea fertiliser per hour for a total annual production of up to approximately 124,200 tonnes per plant, which anticipates 20 days for equipment maintenance and upkeep.

The company estimates that the annual economic potential associated with the proposed Lubbock Plant could be as much as US$77.1 million.

Additionally, the 49 acre land parcel at the proposed plant would allow the company to increase the size of the production facilities, which in turn is projected to double the proposed output capacity. The additional capacity would be used to produce urea ammonium nitrate as well as granular urea.

As previously announced on February 2, 2012, the company entered into a Letter of Intent with United Suppliers for the purchase of up to 300,000 tonnes annually of urea in granular or prilled grade form. The binding agreement, currently under final negotiation between the two parties, will be for an initial term of three years. BioNitrogen projects that the economic potential benefit could be as much as US$558.9 million.

Lubbock, Texas was selected as the location for the first production facility because the site is close to the company's engineering and construction office also located in Lubbock. As a result of this proximity the company intends to utilise the proposed plant as BioNitrogen's primary research and development facility to develop and refine technological enhancements to the company's products and processes. The vision for the Lubbock site is consistent with the company's commitment to continually improve and enhance plant operations and production efficiencies.

"Given the inextricable link between food consumption, production and fertiliser demand and supply balances for the next 40 years, the importance of our inaugural plant in the USA cannot be overstated for both our national and international future customers and shareholders," said Dr. Terry R. Collins, president and CEO of BioNitrogen.