Magnida execs highlight plant progress

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Respond to questions during A.F. open house

by Kurtis Workman
Press Staff Writer

 

Leaders of a proposed project to build a fertilizer plant told members of the public the project, that is anticipated to cost at least $1.5 billion, is farther along than ever before.

“We have $500 million in equity which gives us a great head start the previous project owners did not have,” said Magnida Chairman Ric Sorbo on Wednesday, Jan. 22.

Sorbo, along with a team of experts were in town to give an update and answer questions about the proposed fertilizer manufacturing plant Magnida and their backers hope to build in Power County.

Over 50 people packed the American Falls Library Community Room to hear what Sorbo and his team are planning.

Sorbo introduced several members of the Magnida team in attendence including Joe McCarthy Executive Vice President of Operations, James Lehmann General Counsel, Ahmed Zaki Pincipal, Ed Park Principal and Brian Goldstein Finance Lead.

Sorbo began talking about the project by touching on the goals the company has for the project.

“Our first priority is health and safety,” said Sorbo.

He explained to the crowd the way Magnida plans to protect the health and safety of those involved with the project and the community is centered in the type of plant they intend to build.

“We will be using what is called proven and refined processes. What we are building is the best, state-of-the-art plant in the world using equipment and technology that has been tested and proved in many plants all over the world,” said Sorbo.

According to Sorbo and Magnida team member Joe McCarthy there are 26 fertilizer plants in the United States and nearly 500 plants worldwide using similar technology.

“With so many plants using similar technology we feel the equipment is very well proven and very reliable,” said Sorbo.

Sorbo spoke about other priorities as well.

“We have a very experienced team putting this together. We have the two best, world class engineering, procurement and construction companies, KBR and Bechtel, bidding for the project. We are committed to doing this the right way,” Sorbo said.

KBR and Bechtel each had representatives at the meeting.

He also spoke about another goal Magnida has set for the project.

“We want to have a positive impact on the community. We want to be good neighbors,” said Sorbo.

Magnida plans to accomplish the goal of being a good neighbor by creating jobs and economic growth. Conservative estimates from the University of Idaho indicate the fertilizer plant will add a minimum of $5 million in tax revenue to Power County coffers. Sorbo and other team members pointed to the environmental protections Magnida is planning as another indication of neighborly behavior.

“We will have zero liquid discharge from the plant. Both KBR and Bechtel offer the latest and most effective scrubber technology. The switch to natural gas alone will make the plant much more efficient than the previous coal proposal,” said Sorbo.

McCarthy explained the point in a different way.

“We often get asked one question and so I will answer it now. No you will not smell this plant. Ammonia has a very distinct smell and it only takes a small amount for the odor to be noticeable. I have worked in several of these plants around the world and you can’t smell ammonia inside the plant let alone outside,” said McCarthy.

Sorbo explained Magnida is planning to open an office in American Falls and the development of a community interface plan using the input of a community liaison committee as other ways the company plans to be involved with the community.

Sorbo tackled the topic of the absence of former project lead Ramesh Raman.

“One of the things you may notice is the absence of Ramesh Raman. Many of you became familiar with him over the last few years. He has moved on to other projects. We would not be here without Ramesh. What he did was keep this project alive through the transition to natural gas and even through the economic downturn. It would have been easy for this project to have died off, but he kept it alive,” said Sorbo.

Sorbo told the crowd Raman occasionally checks in on the progress of the project and plans were being made for him to attend the ribbon cutting.

Another topic the Magnida team addressed was project progress.

“One thing that is very important to understand; we do not have a project yet,” said Sorbo.

He explained the projected timeline of the project.

“We have people talking to banks all over the world trying to secure the financing we need, but there will be a day sometime this year when Bechtel and KBR will write a number on a piece of paper, put it in an envelope, slide that envelope across the table to us. If that number is within the scope of economic possibility then we can make the final push for financing. Then there will come a day when we reach “financial close”. That will be the day we have a project,” said Sorbo.

He went on to explain “financial close” is similar to closing on a house.

“That is the day we will sign off on the loans, move that money into operational accounts and we can officially say we have a project,” Sorbo said.

He indicated Magnida expect financial close to happen in late August of this year.

Talking about financing led to another topic of concern for many in attendance: Hoku. Sorbo highlighted the differences between Magnida’s approach to this project versus the process followed by the Hoku plant developers.

“The first difference is in the contract we will have with either Bechtel or KBR. That number they put in an envelope comes with a completion guarantee. Whoever the contractor is will guarantee the plant will be built for that amount. The problem with Hoku is the price of construction and engineering continued to increase beyond what their economic model could sustain. We will have a firm number to work from and will have our funding secured up front,” Sorbo said.

Apart from financing, Sorbo talked about other challenges facing the project.

“We have to move a road, build a rail spur and bring a gas pipeline from the other side of the Snake River,” said Sorbo.

During the question and answer part of the meeting a member of the audience asked about the difficulties and why Magnida would consider the Power County location with so many apparent obstacles.

“The challenges are not as great in our mind when you consider some plants have had to build gas lines over 130 miles,” said Sorbo.

Teh gas line for this plant would be four miles.

Sorbo said the largest reason Magnida favors Power County is the large amount of community support.

“When you look for a site you want to be where the community wants you to be. We have had great support from this community and we are asking you to continue that support,” Sorbo said.

Sorbo concluded the meeting by reiterating Magnida’s interest in community involvement and directed people to their new website www.magnida.com for more information.

4 comments for “Magnida execs highlight plant progress

  1. Greg park
    March 4, 2014 at 6:38 pm

    Who got the bid on this job?

    • admin
      March 6, 2014 at 9:15 am

      Magnida is soliciting bids from two different, national companies. After the full bid is awarded later on this year, the company that wins that bid will start seeking sub-contractors.

  2. ron
    March 24, 2014 at 3:13 pm

    Is there any contract language in the bid that will guarantee the awarded contractor will hire a local workforce to build and operate the plant? Whether its done union or non union, Magnida needs to ensure that skilled workers from IDAHO are going to build and operate it. This project could lose support if there is no commitment in doing so.

  3. April 3, 2014 at 12:36 pm

    Where and who do I reach out to in regards to Magnida’s ambient air monitoring network?

    Our company, an air quality and meteorological monitoring network service provider, was told by ID state agency that Magnida operates an ambient air monitoring?

    I’d like to know if they are soliciting bids for this work as well. Thank you

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