Document 3enz29jxgOEEX5k8bL90V5Rb3

t UNITED STATES STEEL Y APPROPRIATION REQUEST SUBMITTED FOR CONSIDERATION OF BOARD OF DIRECTORS - SEPTEMBER 29, 1964 title - Replace Gas Processing Facilities and Provide for Prorinrt-ion of Anhydrous Ammon!, Capital total 1 0181NUMICR --________ - . I ty>i- II-Y GROSS 67.1Q5.200 68.q47.000 ZZrSi:0-Heavy Products LESS 270.000 LOCATION -- Clairton Works NEW MONEY 67.1Q5.200 S 68.677.000 ncrc*cwcc -- lVerifiable -- jt...j.y. YCAR TO INITIAL OPERATION* -- .Tnn . 1 Q67 after nr total *5.080.000 (See Exhibit "B") RECOVER 8.0___ onDATE SATISFACTORY OPERATION* -- Jan. 1969 INCREASED COST BEFORE FIT - $ APPROPRIATION CLO*fN - June 1067 increased sales/year414.000 Tons Anhvdrous Ammonia-See Exhibit "C"l SALES PENETRATION PERlODi 3 Yn. present conditions! Clairton Coke Works (20 batteries with an annual rated capacity of 7,235,000 tons of coke) is U.S. Steel's largest and low cost producer of coke. Facili ties include coal chemical recovery equipment which produces a wide variety of products for market and coke oven gas for fuel in U. S. Steel Plants. The gas processing equipment (1918-27) is deteriorated and obsolete with necessary replacements "in-kind" during the next few years estimated to cost $28 million. The coke oven gas produced contains objectionable amounts of sulfur. The ammonia in the gas is removed through the production of Ammonium Sulfate. The market for Ammonium Sulfate has steadily declined during the past several years. A new method for gas processing has been developed which uses higher pressure gas compression and cryogenic separation techniques. This method has been satisfactorily operated in Europe and in pilot plant Applied Research operation at Clairton Works and has many attendant benefits 1 It is an ideal base method for the subsequent low cost production of anhydrous ammonia. The market for anhydrous ammonia, a prime source of fertilizer nitrogen, is rapidly growing and will continue to grow to meet an expanding domestic and world population. Its production at Clairton in large quantities 11,150 tons per day) at a low cost will enable U.S. Steel to obtain a sizable portion of this profitable market. Authorizations to date related to this project are shown oh Exhibit "J" attached. PROPOSAL: To replace the coke oven gas processing facilities with, new modern equipment to remove the tar. and napthalene and ammonia from the gas from 19 batteries and the light oil and sulfur from the gas from 16 equivalent batteries and to provide facilitiei for production of 386,000 annual tons of synthetic anhydrous ammonia. To provide funds for five anhydrous ammonia distribution terminals with release of funds for each individual terminal subject to prior approval of the Operations Policy Committee after location, design, and estimated cost'becomes firm. The Carnegie Natural Gas Company will require an expenditure of $3,832,000 for supply pipe lines and the Ohio Barge line' $4,750,000 for a towboat and six barges for river transportation of anhydrous ammonia. This results in a total estimated project cost of $77,529,000 (See Exhibit "A"). Authorizations will be required for long term natural gas ar.d barge contracts and tank car agreements. Authorization Requests will be submitted as required.. BENEFITS ANTICIPATED: (1J Replacement of deteriorated obsolete facilities with new modern equipment. (2) Annual sales of 43-k^fiOO tons of anhydrous ammonia and sales of additional chemicals. (3) Availability"of 340--tons per day of high purity oxygen for future use. (4')' E~xpans*ion poss..i.b...i.l.i.t*ies s,and relat-ed- -benefits not subject to evaluation (Exhibit "H"). L B. WORTHINGTON attachment* - ibchiU-lii - Dudgat Information, Recommended by howiatiow Committee Operations policy Comm DATS . Sent-. 18. 1064 oat*-Sent.25,106' L. L. Lewis ** : .y J - Auth. to Dato AUTHORIZED 8Y executive Committee OARO OF DIRECTORS Date -- _ Date - . SECY. SECT