Part-4

2

Project Charter

Trine University

Project title: Beaumont blue ammonia production facility-$2,060m

Purpose:

The purpose of the project is to produce ammonium dichromate by chemically converting the inorganic form of ammonia, NH3, into its organic form – CH4. The process for producing ammonium dichromate is called alkylation, which involves a two-step reaction. First step entails water splitting into hydrogen and hydroxyl radicals as well as oxidation of OH-. This causes an increase in electrons and free radicals, forming reactive chlorine compounds that react with ammonia molecules.

Objective:

· The Beaumont Blue Ammonia Production Facility will be the first of its kind in the world, and it is projected to produce over 2.4 million tonnes of liquefied ammonia per year.

· The facility will use feedstocks such as natural gas to make hydrogen, which will be used as an energy source for ammonia production.

· Once finished, this project is expected to generate many jobs in our region while also increasing economic development benefits throughout the local area.

· The facility was originally designed to produce pure liquid ammonia and nitrogen gas for producing fertilizer and fertilizing crops.

Scope:

Beaumont Facility announced that it has achieved a key operational milestone which is the beginning of its transition from ammonia production to nitrogen gas. Now that the facility has begun transitioning from ammonia production to nitrogen gas production. In addition, this process could have a significant impact on reducing greenhouse gases with the switch from burning natural gas by-products such as carbon dioxide emissions and methane flaring.

Success criteria or expected benefits:

· The Beaumont Blue Ammonia Production Facility will be adding more than 4,500 jobs to the region and manufacturing 730 tons of ammonia per day at its opening.

· This project could have $2 billion in economic benefits for Jefferson County.

· It would also help the area comply with environmental regulations for the next 25 years without exceeding nitrogen dioxide limits set out by US EPA that are scheduled to rise dramatically over time.

· The Beaumont Blue Ammonia Production facility is forecast to contribute to the regional economy through wages and salaries, direct procurement of goods and services from local industry, taxes on economic activity and infrastructure investment in the region.

Funding:

$2060m is the estimated cost for this project. The facility is due to commence production in 2020 and when it does, it will be able to produce up to one billion litres of blue ammonium nitrate per annum. This clear liquid ammonia product has many uses within agriculture. They include plant nutrient management and animal feed supplementing.

Blue ammonium nitrate is not only used as a form of plant nutrient management, it is also used as a boost to stock feed. An increased nitrogen level in the diet raises the amount of protein that can be obtained from a given amount of feed. This reduces the cost to farmers and also has an environmental benefit, as less fuel is needed to transport food around the country.

Major deliverables and Milestone schedule:

· The project is considered to be one of the major deliveries for Lee County, Texas and Gulf Coast refineries.

· Beaumont has been awarded with this major production facility because it provides the essential elements needed for ammonia processing plant construction such as crude and treated hydrocarbons plus liquefied natural gas, feedstock chemicals and a source of electrical power.

· This facility has been operated continuously for 58 years and employed approximately 6800 people at its peak.

· Milestone schedule for the project is it in the year of 2021 and completes in the year of 2023.

· The total cost of operating this plant came out to be $2,060 Million US Dollars and produced 747500 metric tons of methane gas.

Acceptance criteria:

· The project is a $2,060m project that was announced by Beaumont Petroleum, who have the sole rights to sell Blue Ammonia in the Eastern North American Market.

· The production facility will be dedicated entirely to producing purified ammonia gas and consequently produce 100% of its own nitrogen-based fertilizers for all markets for their customers.

· As it is not possible for any other company or country outside of Western North America to produce purified ammonia gas due to the high-heat processing requirements.

· This production facility will be an essential piece of infrastructure for feeding nearby coal power plants and cement factories with high quality air emissions that meet stringent Environmental Protection Agency (EPA) requirements.

Key assumptions:

The following assumptions were taken from the Beaumont Blue Ammonia Production Facility – $2,060m project and are categorized as an average construction cost of $400m per month will be spent on the project. Beaumont Blue Ammonia Production Facility will be available for use in Australia, New Zealand and other areas such as South Africa, Zambia and India where it has been trailed successfully.

Revenue generating operations will commence in the third quarter. Production capacity is expected to increase from 12990 tonnes per year to 14600 tpy with a capital cost of approximately $250 million and an operating cost of approximately $130 million per year. The plant will take advantage of its coastal location to import cheap feedstock from around the world.

An assessment by reputable engineering consultants suggests that this project may not meet its contracted production targets and promises to deliver over $2 billion in value for communities, businesses and investors

Constraints:

With the recent works of the Obama administration, many changes have been made which is good for the people. Among these changes was a new Environmental Protection Agency regulation which would require 30% of fuel production to be renewable.

In order to meet this regulation, Shell chose to build a new plant called the Beaumont Blue Ammonia Production facility near Houston, Texas. This project was seen as an environmental nightmare because it will produce large amounts of ammonia which can harm both humans and animals as well as cause acid rain.

Major risks:

The risk for the project as amount of ammonia being sold and needed for the production facility is expected to be about 72,000 tonnes per annum. With an estimated 12 plants around Australia with a capacity to produce ammonia, it is important that the Beaumont production facility can locate enough ammonia to sustain its needs.

Another risk facing the plant is that it needs to obtain sufficient energy. The way in which the plant operates means it produces large volumes of waste heat which will require energy-efficient solutions in order to reduce costs and also improve efficiency gains. The Beaumont production facility will use up to 40% less electrical energy than other types of plants that produce liquid ammonia.

The project proponents are proposing to construct a new gas-fired ammonia plant with facilities to produce over 150,000 tonnes per annum of ammonia and related products, making it one of Australia’s largest gas-fired power plants. Beaumont Blue would use natural gas from Bass Strait as feedstock to produce up to 135 MW of emissions-free electricity using clean, cutting-edge technology that captures carbon dioxide emissions and provides Australia with some security against future international energy price shocks.

Approval requirements:

The Beaumont Blue Ammonia Production Facility is a large, 8,000-acre business complex in Northern Alberta. The facility's purpose is to produce blue ammonia as an alternative to traditional brown ammonia and it's worth $2,060m.

The driving force behind the project was the Government of Alberta, which invested $1 billion. The Alberta government signed off on this arrangement in 2008 via the province's Crown Investments Corporation (CIC), which oversees decisions on investments of up to $500 million from the province.

Project manager: B Venkata Kodandanaveenmurali Mylavarapu

Sponsor designee:

EKOS Research Group LLC, Franklin County Judge Mike Green's office and the Franklin County Commissioners filed a motion with TBX to appoint EKOS as the Sponsor Designees for BIP. EKOS will be responsible for managing all day-to-day operations of BIP, with full authority over all operational decisions at BIP.