CIA WW[ ppnfW PROGRAM
Upgrading Soviet Fertilizer Technology
CENTRAL INTELLIGENCE AGENCY Directorate of Intelligence May9
Upgrading Soyict Fertilizer Technology
Recently developed methods of producing ammonia the basic ingredient of all synthetic nitrogen fertilizercould, if extensively applied over the next several years, save the USSR hundreds of millions of dollars. New technology, based on large single-train units equipped with centrifugal compressors, has permitted savings of up toercent in capital and operating costs in plants in the United States and other Free World countries. Planners in the Soviet Union are only beginning to introduce the new techniques, although they are well aware of the potential benefits offered. Soviet ammonia is therefore likely to remain relatively high cost in comparison to the West, for many years.
No Soviet ammonia plant in operation at the end8 is believed to have been of comparable efficiency to modern installations in the Free World. One large-capacity ammonia plantseveral features of the new technology was purchased from France5 and was scheduled for operation by the endut start-up has not been announced. The Soviet press has reported that Soviet designers and machine builders are now designing and constructing equipment for large single-train units equipped with centrifugaland that three Soviet-designed plants incorporating new technology were At least one of these plants was in operation by
Note ; Thio memorandum was produced solely by CIA* It vac prepared by the Office of Economic Reeearch*
The success or failure of the USSR in adopting the new technology will Influence the efficiency of investment in fertilizer production facilities for years to come and will provide an important tost of the ability of Soviet industry to take advantage of new technological developments. Its past record in this regard has been poor, partly because immediate increases in production have been given priority over improved plant efficiency and longer range reduction in costs. Although the USSR undoubtedly is upgrading tho efficiency of its ammoniacapacity and will achieve significantin costs, the full potential of the new ammonia technology will probably not be realized in the next few years. Soviet production of ammonia has Increased rapidly, and throughout the past four years has been equal to about one-half of US
Present plans call for doubling Sovietproduction capacity. It is doubtful, however, that this goal will be attained, or that all of tho ammonia production capacity added will be of the new type. Delays almostwill occur in building large new plants and in getting them to operate at designed levels. Soviet-developed equipment with the capacities now contemplated has not yet been tested on ascale. Construction of the new-type plants will probably not be rapid enough to permitof many obsolescent plants within the near future. Under pressure of high targets for the production of fertilizer, output is likely to be given priority over cost reduction, as it was.
The USSR is continuing to depend in part on imported equipment and technology for its new plants. Czechoslovakia is supplying equipment for one of the three large Soviet-designed plants in which new technology is being employed and has agreed to cooperate with the USSR in manufacturing additional modern, large-capacity ammonia Soviet officials are also seeking toadditional plants or components from Pree World firms.
while the USSR is offate start inthe new technology, Free World countries are moving quickly ahead in its application. In the United States, for example,lants of the new typeaccounting for perhaps one-haif of the total US ammonia production capacitywere scheduled to be in operation by the endndbsolescent plants were closed down. With the adoption of the new ammonia technology progressing slowly in the USSR, the average level of Soviet technology for theof fertilizer, although improving, probably will remain far behind that of the United States.
Soviet Need for Improved Ammonia Technology
1. The USSR, like other countries, has been seeking more productive and less expensive ways of manufacturing ammonia, the basic ingredient of all synthetic nitrogen fertilizers. Approximatelyercent of all chemical fertilizer produced in the USSR is nitrogen fertilizer, and three-fourths of the total Soviet output of ammonia goes for this purpose. Production of nitrogen fertilizer is scheduled to increase byercent and ammoniaercent. Coals for expanding the output of these products0 cure not known, but published Soviet plans call for doubling total capacity to produce. roportionate increase in capacity to produce nitrogen fertilizercoupled with greater use of ammonia in theof plastics, explosives, chemicals, animal feeds, and otherould require an approximate doubling of ammonia production capacity during the same period. This would entail addingillion metric tons of ammonia production capacity. Application of the ammonia technology that has been increasingly used in recent years in Free World countries can effect substantial savings for the USSR.
Basic TechnologyOld and Now
2* In this "new" technology the basic reactants, hydrogen and nitrogen, have remained unchanged, and the manner of reacting them under pressure andatalystalthough different in degree, employs essentially tho same principles that have been followed since bofore World War I. Theunder which the various reactions occur,have boon altered. Ammonia plants using either the now or older technology begin byaw synthetic gas. Various hydrocarbons can be used as the source of hydrogen. Older plants around the world frequently employed coal or coke, but the new largo plants going up in the United States aro based on natural gas, refinery gas, by-product gases from chemical processes, or naphtha. The hydrocarbon feed and steam are preheated and partly combined or "reformed"rimary reforming furnace. The mixture is then further combined with preheated air (the nitrogen source) under pressureecondary
to the success of the single-train concept, but the major key to the dramatically improvedof ammonia production is the integrated energy system. This system recovers "waste heat" from the gas-reforming process in the form of steam that is used to power the turbine driveentrifugal compressor and to satisfy further plant requirements for process steam and heating. conomies have been achieved by increasing the pressure used in reforming the natural gas fromounds per square inch (psi)si, and by reducing the ammonia synthesis pressuresi. The reduction in synthesis pressure has been accomplished by useingle steam-driven centrifugal compressoror,ew partial single-train units, two centrifugal compressors. Older plants frequently employed several reciprocating compressors that, in some cases, developed up0 psi. The lower pressure in the new plants reduces the amount of power required for refrigeration. Thus the centrifugal compressor is an important element of the more efficient energy system. For aof the ammonia production process, annotated to indicate sources of savings in the new large plants, see the flow chart.
Past Soviet Rocord
he extent to which the new technology is employed in the USSR will affect the efficiency of investment in fertilizer production capacity for years to come. Construction of the new-type ammonia plants willest of the ability of Soviet industry to respond quickly toinnovation. Its past record in this regard has been poor, partly because immediate increases in production have been given priority over improved plant efficiency and longer range reduction in costs. Soviet output of ammoniawhich throughout the past four years has been equal to about one-half of US productionhas increased rapidly as is indicated by the following tabulation of estimated production:
(Thousand Metric Tons)
(Thousand Metric Tons)
the seven-yearf ammonia in the USSR more than tripled, part of the increase coming from equipment purchased from Free World firmsfrom Czechoslovakia. The imported equipment probably was modern in comparison with that in most Soviet-designed plants, but all plants that went into operation in this period were smaller and certainly less efficient than the large single-train plants that the United States began to put into operation The USSR did, however, succeed in reducing the unit cost of ammoniabyercent, largely by increased use of natural gas rather than coal or coke as the basic raw material. ore than half of all ammonia produced in the USSR was derived from natural gas, compared with less than
Progress in introducing other processduring the seven-year plan period/was slow. In an attempt to meet output goals, newly developed equipment was produced and installed without adequate testing. Defects in design and manufacture played havoc with schedules fornew plants. Problems with compressors,
for example, delayed the start-up of one Soviet ammonia installation for six months. Ths USSR also encountered lags inrocess forfeed material for ammonia plants by stoarr. conversion of natural gas under pressure. The rising demand for ammonia, accentuated by Soviet purchase of four large nitrogen fertilizer plants from the Netherlands, apparently ledoviet decision to continue building ammonia plants based on an older, less efficient fssd-material process. The Soviet press has indicated
that losses to the Soviet economy stemming from this decision alone will amount toillion rubles per year for some time to come.
Recent Soviet Interest in Large Modern Plants
9. oviet ammonia plants generally consisted of two or more lines, eachons per year. Byoviet statements began to show an awareness of thesavings offered by large, single-train units with annual capacitiesons or more. Soviet machine builders, however, were onlyto produce lines with capacities ofons per year. Obviously unprepared to
produce larger units, the USSR5 purchasedrench firm an ammonia plant consisting of two lines, each with an annual capacityons. This large plant incorporates severalof the most modern technology and will employ centrifugal compressors for preparation of the gas. It will, however, use reciprocating compressors for ammonia synthesis. Initial operation of this plant was planned forut there has been no announcement concerning its operation and it may have been delayed.
Inremier Kosygin stated that unit investment costs could be reduced byercent by building production lines with annual capacitiesons of ammonia, rather than lines with capacitiesons. Later in the same year, it was reported that ammonia units with capacitiesons per year would be built in the USSR during the current five-year. Asowever, the largest Soviet-designed ammonia production lines still had annual capacities of onlyons, although work on larger units clearly was under way.
By8 the Soviet press indicated that Soviet technicians had developed the basis for producing large, single-train ammonia plants having capacitiesons per year. Capital investment per ton of capacity in these plants was expected to beercent less than in plants built previously- The USSR is not known to have had any ammonia plants in operation by the
end8 that Incorporated all major features associated with the new technology. However, three Soviet ammonia plants under constructiont Novgorod, Cherepovets, and Rovnoare to employ new technology that presumably will include at least certain of the features found in modem Western plants. Earlyquipment was beingin the USSRarge Soviet-designed singlo-train synthetic ammonia plant then under construction. This plant, possibly one of the three already mentioned as being built with new technology, is toentrifugal compressor that will developomewhat higher pressure thansi used for ammonia synthesis in the most modern Free World plants.
Corrp.ir.ibiii tySc;vio locjy 'Jncert.un
yet, not enough is known about theplants to be able to determine whetherbe fully comparable to those erectedFree World countries. Soviet publicationsthat the capacity of the plant at Rovno,commissioned inay bethan that usually associated with theWorld plants. The plant at Cherepovetscoke-oven gasarge metallurgicalfeedstock. An article publishedhe intention to build an ammonia plantmentioned this possibility. SomeFree World sources suggest that ammoniacoke gas can be competitive with plantsgas if situatedource of Natural gas could, however, now beat Cherepovets through pipelines fromVuktyl. In any case, the USSR can beencounter problems in building and bringing up
to design levels of operation, large new ammonia plants based on domestic technology and equipment that is as yet untestedommercial scale.
Partial Dependence on imported Equipment
new Soviet plants appurently willbuilt entirely with domestic equipment. quipment produced in Czechoslovakiainstalled in the plant at Cherepovets,scheduled toons of ammonia The nature of the Czechoslovaknot been disclosed, but it may include aammonia reactor developed inond tested thareilot plant.
The reactor is claimed to be very economical and adaptable to units capable ofons of ammonia per year* By the endo units of such size were known to have been produced in Czechoslovakia, but in December an agreement was concluded whereby Czechoslovakia and the USSR are to cooperate in manufacturing ammonia installations with unit capacitiesons per year.
14* Interest in acquiring Free World equipment has also continued. Soviet officials are seeking
to purchase one or more complete ammonia plants of the new typo from Japanese or European firms and have been negotiating for the purchase ofand turbines from various US firms. Whether th* USSR chooses to base its new ammonia plants primarily on Communist or on Free World technology, the level of benefits will depend on the speed with which new plants can be erected and brought up to capacity operation. Undue delays could be very costly.
The Stakes Are High
15. The efficiency of the Soviet nitrogen industry over the next decado will be heavily influenced by the type of ammonia plants built in the USSR during the next four to five years. The three large Soviet-designed plants already mentioned, together with the modern plant purchased from France, probably will add about one million tons of new capacity. umber of additional large-capacity plants would be required to achiove an increase ofillion tons in ammoniacapacity. Data concerning plants in the United Kingdom suggest that such an increase could involve capital costs0 million if based on single-train ammonia plants with annual capacitiosons each,0 million if based on plants one-third that size.* Moreover,
* Capital costs for ammonia plants commissioned in the United Kingdom? were reported toer ton of annual capacity in three single-train plants, each with an annual production capacityone. Capital costs for plants with annual capacitiesone reportedly would have been almost0 per ton of annual capacity. to seme VS sources, the new type of ammonia plant can reduce capital costs by as much aso SO percent, depending on the capacities of the plants,
data on US experience indicate that the difference in annual operating costs of the two types of plants could amount0 million, assuming an increase
in productionillion tons.* Although these data arc approximate, and costs under Sovietprobably would vary somewhat, the analogies serve to illustrate the large potential benefit that the new ammonia technology offers the USSK.
potential savings for the USSRevon larger if some of the obsolescentin operation were replaced by plants usingtechnology. In the Unitedhat accounted for aboutercent ofammonia production capacity at the beginning of
permanently closed. however, is unlikely to retire manyplants in the near future. Shutting downplants will depend on the speed with whichcan be built and on the willingness ofschodule retirements. Prospects are noteither count. Soviet planners and plantare slower than their US counterpartsobsolescent processes and machinesstill productive. Soviet plants frequently
are retained in service in spite of operational costs that considerably exceed those of more modern plants or the average costs in the industry. demand for ammonia in the USSR is still far from satisfied, and many Soviet plants were built so recently that they have not been depreciatedoint that suggests early retirement. three-fourths of the ammonia produced in
from units that have been put intowithin the past nine years, and theperiod for equipment in theindustry is aboutears.
savings undoubtedly can alsothrough use of the new technologyand modernizing existing ammoniaSoviet source indicates that some expansionundertaken will involve unitsons, and it is probable that
* US data suggest that production costser ton are possible in an integrated ammonia plant producing about tons per year, whereas costslant producing onlytone per year areer ton.
such expansion will incorporate many elements of the new technology. At tho same time, someprobably will also involve smaller capacities because it is doubtful that Soviet equipmentare yet ready to supply large units in quantity. There will be increased use of natural gas, the raw material favored in many of themmonia plants built in the United States. Natural gas is scheduled to provideercent of the ammonia produced in the USSR US experience suggests that the USSR probably can reducecosts at small, old plants by incorporating some elements of the new technology but that the capital outlays required to make such plants as efficient as large new plants would be prohibitive.
Present Position and Prospects
18. The present position of the USSR probably is not as advanced as that of the United Statesither in perfection of the new technology or in capability to introduce it quicklyide scale. It is doubtful that as many ammonia plants of the new type will go up in the next four years in the USSR as were put Into operation in the United States. he USSR will increasingly emphasize construction of large new plants, but expansion and modernization of existing units will continue. Significant improvement in the efficiency of production andreduction in capital and operating costs of Soviet ammonia plants almost certainly will result, but delays and difficulties in introducing the new tochnology probably will prevent full realization of the cost reductions that are Free World countries,ead of several years in application of the new technology, are moving ahead rapidly in modernizing their ammonia production capacity, and the averagelevel of ammonia plants in the USSR probably will lag behind that of major Free World producers of ammonia for some time to come.