MOOSE JAW — A Saskatoon-based agriculture company plans to construct a multi-billion-dollar nitrogen fertilizer production plant east of Moose Jaw that is expected to financially benefit area farmers and municipalities.
Genesis Fertilizers Limited Partnership plans to construct a $2.3-billion nitrogen fertilizer production and distribution enterprise SuperCentre near Belle Plaine that is expected to produce 1.128 million tonnes per annum (MTPA). Construction should start in 2026, while the plant should be operational by 2029.
Construction will create more than 1,500 direct jobs and 5,000 “induced” jobs, while 180 permanent full-time employees will run the plant once it’s operational. Also, the plant’s profits will return to producers.
The company — formed in 2021 — is a farmer-owned initiative that allows producers to invest based on their fertilizer requirements, according to a city council report. This ownership model should secure future supply and provide financial distributions based on plant profits, which should offset fertilizer costs.
Furthermore, by establishing an ammonia urea fertilizer manufacturing complex near Belle Plaine, Genesis Fertilizers aims to reduce farmers’ reliance on imports and high freight costs and ensure a consistent and affordable supply of fertilizer for Western Canadian producers, the report continued.
Genesis Fertilizers has a network of SuperCentres strategically located across the three Prairie provinces, with these venues sourcing, storing, blending and distributing fertilizer directly to producers, the document added. This distribution network also lowers the overall cost of fertilizers to make them more affordable for farmers.
Presentation
Terry Drabiuk, vice-president and chief business development officer for Genesis Fertilizers, spoke about the proposed project during city council’s recent executive committee meeting.
Western Canadian farmers pay the highest prices for urea fertilizers in the world because they farm in land-locked Prairie provinces that are far removed from major import supply routes, he said. This allows local producers to charge farmers high prices based on the “NOLA-plus-freight price-setting mechanism.”
NOLA stands for New Orleans, Louisiana, since that’s from where most fertilizer is produced, Drabiuk noted. Meanwhile, fertilizer manufacturers in Western Canada enjoy low costs of production and consistently high urea profits due to the abundant supply of low-cost natural gas.
“Most of the time, Western Canadian farmers pay excessively high prices for fertilizer, (while) higher input costs reduce farmers’ income,” he said.
Drabiuk added that Canada is a leader in selling natural gas and that Western Canada produces the lowest-cost natural gas, while Canada is one of the cheapest places to manufacture fertilizer.
Belle Plaine is a great location for a nitrogen urea fertilizer manufacturing complex because it’s located 28 kilometres from Moose Jaw and 40 kilometres from Regina, he said.
Moreover, both national railways have nearby rail lines, while the site has access to water, electricity and natural gas, and a solid road network.
“… the nitrogen plants in Western Canada are selling at the highest cost and they’re manufacturing at the lowest cost, so they’re cash cows,” said Drabiuk. “That’s why we’re building this plant.”
Genesis Fertilizers “lucked out” after buying land near Belle Plaine because adjacent to the site, he continued. Therefore, the latter will capture 800,000 tonnes to one million tonnes of carbon dioxide from the former and make the former “the only green nitrogen fertilizer plant in the world.”
Meanwhile, the federal government will provide $178 million because of the carbon-capture aspect, while the provincial government will provide $545 million in tax-focused incentives and benefits, Drabiuk said.
The new plant will provide security for the agriculture industry since it will reduce farmers’ dependence on global markets and mitigate tariff risks and address fertilizer price volatility, he continued.
The majority of fertilizer plants in Canada are foreign owned, which means most of the profits made from nitrogen production leave this country, even though incumbents pay royalties, taxes and hire local workers, Drabiuk said.
Drabiuk added that Genesis Fertilizers has “an army of engineers working on this project around the globe” and has attempted to de-risk the project so it is a success.
The next executive committee meeting is Monday, March 10.
