Connecticut-based Phibro LLC and a group of investors said on Wednesday they will invest about $450 million to convert the former SG Solutions coal gasification plant near West Terre Haute into an ammonia fertilizer production facility.
The SG Solutions site is located next to Duke Energy's now closed Wabash River Station on Bolton Road.
The project is through Phibro's affiliate Phillip Brothers Fertilizer and will create about 100 new jobs, the company said.
“We are thrilled to be able to put this plant’s technology, which has outlived its viability in an era of reduced coal-fired power generation, to a more productive economic use, manufacturing much-needed ammonia fertilizer for the region," said Simon Greenshields, president and CEO of Phibro LLC.
Greenshields said Phibro next will take several months for engineering and "environmental due diligence." The company also plans to meet with Indiana economic development officials for assistance, plus likely seek local tax abatements.
The project is targeting a mid-2018 completion date.
Phibro acquired the former SG Solutions plant Tuesday from Wabash Valley Power Association.
Greenshields, the former co-head of Morgan Stanley’s commodities business, said the Phibro Group had been working on another deal "when we became aware of the fact that Wabash [Valley Power Association] was planning to decommission the plant, and we approached them and told them about our plans. Wabash [Valley Power] knew me from my days with Morgan Stanley and were receptive," Greenshields told the Tribune-Star Wednesday.
"We worked on a deal, and it took about two months to complete," he said.
Following the conversion, the plant will use petroleum coke, called “petcoke,” sourced from Midwest refineries as a feedstock to produce ammonia. Petcoke is more economical than the natural gas many other ammonia plants use as a feedstock and will enable the plant to offer local farmers more affordable fertilizer, according to the company.
The gasification plant’s clean coal technology, which was first funded by the U,S. Department of Energy more than two decades ago, allows for repurposing it to a world-scale ammonia production plant. There are very few plants in the U.S. with similar technology, according to the company.
Greensheilds said the site is unique in that it already has 75 percent or more of needed equipment for manufacturing. "We have the source of hydrogen with the gasifier" from the gasification system at the former coal gasification plant. The machinery will need some refining to produce hydrogen, Greenshields said.
"We think we will produce up to 1,500 metric tons [of ammonia fertilizer] per day," Greenshields said, "which is a good-sized plant. The market is robust, and a lot of needs are being met now by imports. We will be displacing some of those imports.
"There is some self-sufficiency argument here, which is why we think it is a good idea," as the product will be made in the United States for use in the Midwest, Greenshields added.
"This transaction benefits numerous stakeholder groups as it will create and save manufacturing jobs, provide the most affordable fertilizer for farmers in the area and reduce our nation’s reliance on imported ammonia fertilizer," Greenshields said in statement.
"We would like to take this opportunity to thank Mr. Jay Bartlett, C.E.O. of SG Solutions and Wabash Valley Power Association and his entire team for their support and assistance throughout this process. We look forward to commencing work on this project with our partner Quasar Energy Partners," Greenshields said.
Nalin Gupta, managing partner of Quasar Energy Partners LLC, commented, “We are proud to partner with the state of Indiana and other local constituents to creatively repurpose and expand existing infrastructure," Gupta said.