Urea plant proposed for Southland

A $1.4 billion coal-to-fertiliser plant could be built near Mataura by Solid Energy and Ravensdown, the latest plan to tap Southland's vast lignite resources. The plant, to be built near Solid Energy's lignite fields in Eastern Southland, would create about 500 jobs and turn an estimated 2 million tonnes of lignite into 1.2m tonnes of urea annually reports The Southland Times. A preliminary study should be completed early next year, with the plant potentially operating by late 2014. Solid Energy chief executive Dr Don Elder said the lignite-to-urea study was running alongside investigations into a lignite-to-diesel plant. The urea plant could be developed first, or the two could take place in parallel and form the basis of a "syngas park", he said. Dr Elder said the urea plant would be fully carbon compliant. "Solid Energy is already investigating a range of options for managing CO2 emissions from our planned coal-to-lignite plant, including carbon capture and storage, biosequestration and biofeedstock options." Ravensdown chief executive Rodney Green said a domestic urea supply would be of a significant benefit to farmers because they would not be at the mercy of international commodity prices. Last year urea, a nitrogen fertiliser used to enhance grass growth, rose from $345 a tonne to $1110 a tonne. At those prices the plant would generate about $1.3b a year in exports.