February 02, 2006 --- Vol. 12, No. 7February 2006

Agrium restarts Kenai nitrogen plant

Agrium Inc. is restarting its Kenai, Alaska nitrogen fertilizer plant after a shutdown due to a cold snap that boosted home heating demand and tightened natural gas supplies in the Cook Inlet region, the company said in its quarterly earnings conference Feb. 2.

“Kenai is in the process of restarting,” said Ron A. Wilkinson, Agrium vice president of wholesale. “We’ve got just enough gas cobbled together to do that.”

Agrium shut down one plant at the Nikiski complex Jan. 23 and one and another Jan. 25, after scraping by for a couple of weeks on a marginally sufficient supply of gas for production.

The company said the shutdown was something it had planned for.

“We anticipate a little bit of cold in Alaska,” Wilkinson said.

Agrium has contracts in place with suppliers for 2006 operations, but the contracts give priority to utilities when demand for gas rises. Delivery of gas to the company’s plant dropped to less than half of the 80 million cubic feet per day needed for production.

Wilkinson said the company expects anticipated warmer temperatures to allow Nikiski plant operations to continue as normal for the rest of the heating season.

North Slope production down marginally

Alaska North Slope crude oil production averaged 857,271 barrels per day in January, down marginally (0.3 percent) from a December average of 859,838 bpd.

BP Exploration (Alaska)’s Northstar field had the largest month-to-month production drop, down 10 percent. The field’s production averaged 49,462 bpd in January compared to 54,990 bpd in December. The Alaska Department of Revenue said an engine was replaced in a gas compressor at the field, slowing production Jan. 17-27.

Production at BP’s Milne Point field averaged 42,165 bpd in January, down 5.6 percent from a December average of 44,659 bpd. The BP-operated Endicott field averaged 20,726 bpd in January, down 1.6 percent from a December average of 21,072.

The ConocoPhillips Alaska-operated Alpine field averaged 127,880 bpd in January, down 1.6 percent from a December average of 129,910. Revenue said Alpine production slowed Jan. 3-4 for minor pipeline repairs.

Production from the BP-operated Lisburne field averaged 40,124 bpd in January, up 3.2 percent from a December average of 38,894 bpd. Production from BP-operated Prudhoe Bay averaged 406,578 bpd in January, up 1.4 percent from a December average of 400,965 bpd.

ConocoPhillips Alaska-operated Kuparuk averaged 170,336 bpd in January, up 0.6 percent from 169,348 bpd in December.

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