Agrium says its Kenai Blue Sky Coal Gasification Project has completed a preliminary review for a coal gasification facility in Alaska. It is proceeding to phase two, which involves doing a “detailed feasibility review, further development of industry partnerships, more detailed definition of the design and commencement of environmental permitting.”
In April, Agrium’s top official in Alaska, Bill Boycott, put a $28 million price tag on phase two. He said the goal was to “create a bankable commercial deal” that Agrium could “then take to Wall Street” to finance the $1.5 billion to $2 billion gasification complex using coal from the Beluga deposit on the west side of Cook Inlet.
Agrium hoped for a total of $5 million from the state and feds for phase two, and the balance from grants and industry sources.
In its Aug. 31 announcement the company said it had been awarded a $2 million grant from Alaska’s Denali Commission and a $5 million grant from the State of Alaska.
If built, the gasification facility would produce off-take gas on a long-term basis for Agrium’s nitrogen facility at Nikiski, which is in danger of closure because of dwindling supplies of natural gas from the Cook Inlet basin. The facility would also generate competitively priced electricity for the regional power grid and provide carbon dioxide for enhanced oil recovery in the basin’s maturing oil fields.
“The facility could be operational by 2011 and is based on proven technology,” Agrium said.
Editor’s note: Watch for full story in the Sept. 10 issue of Petroleum News, which will be available online at www.PetroleumNews.com on Sept. 7th.