JAMESTOWN, North Dakota — CHS Inc. announced Friday that it is moving forward with a plan to build a $3 billion fertilizer plant near Jamestown, using abundant natural gas from North Dakota's oil patch as a feedstock.
North Dakota Gov. Jack Dalrymple and CHS President Carl Casale announced the project two years ago, but it had been put on hold due to escalating costs.
CHS, a farmer-owned cooperative based in Inver Grove Heights, Minnesota, said its board of directors gave final approval of the project on Thursday.
"With this decision, CHS is taking an important, strategic step on behalf of its membership owners by ensuring them reliable domestic supply of nitrogen fertilizers essential to help farmers raise healthy, profitable crops," Casale said in a statement.
Casale said plant construction could begin this fall, and operating in 2018. It would employ between 160 and 180 workers, the company said.
CHS said the project would be the largest project in its history and the largest single private sector investment in North Dakota.
Dalrymple and North Dakota's congressional delegation hailed the project as good news for farmers and the state's energy industry. Fertilizer produced at the plant would help to reduce U.S. farmers' reliance on foreign sources of fertilizer.
Officials said it would be only the second fertilizer plant to be built in the United States in the last 30 years.
"This is a historic investment," U.S. Rep. Kevin Cramer said.
Sen. John Hoeven said he is working to help the company secure a $1 billion loan from the U.S. Department of Energy.
Anhydrous ammonia, which adds nitrogen and other nutrients to the soil, is a common farm fertilizer, used in boosting production of corn, wheat and other crops. The plant will supply anhydrous ammonia and other fertilizers to farmers and agricultural products retailers in North Dakota and surrounding states.
North Dakota's natural gas production has been rising along with its oil output, leaving state officials and regulators scrambling to find ways to process and sell the fuel.
About a third of the state's natural gas production is burned off and wasted because the pipeline networks to collect it and factories to process it are still being built.
The proposed factory will be a major customer for natural gas and would reduce CO2 emissions in the state by 592,000 tons per year capturing that gas that might otherwise go up in smoke, officials said.