House OKs railroad bonding for Agrium
The Alaska House passed a bill April 25 authorizing the Alaska Railroad Corp. to issue up to $2.9 billion in bonds to participate in the Agrium Kenai gasification project.
House Bill 229, sponsored by Rep. Mike Chenault, R-Nikiski, gives the railroad the authority to participate in the project by issuing tax-exempt bonds to finance all or a portion of the project proposed by Agrium U.S. Inc. to bring coal from Healy to Kenai for gasification and electrical generation for the Agrium fertilizer plant’s operations and for Southcentral Alaska.
Chenault said that the Agrium plant is in danger of being permanently shut down due to lack of natural gas feedstock “and that would be a catastrophe for the Kenai Peninsula.”
“Allowing the railroad to bond out the project helps its feasibility and enhances the project’s economics, which enables the project to move forward,” he said.
Bill now moves to Senate HB 229 authorizes bond issuance for all or a portion of the project: facilities and equipment for the transportation from Healy to Kenai; and facilities and equipment for coal gasification and electrical power generation adjacent to the Agrium fertilizer plant.
The bill was amended on the House floor to include a Port MacKenzie rail link.
The Alaska Railroad Corp. and Agrium discussed the project with legislators in late February (see story in March 4 issue of Petroleum News). Alaska Railroad Corp. President and CEO Pat Gamble told legislators that building a spur line to Port MacKenzie “is a pricey project” but if that line were down there would be “a real opportunity to move goods to tidewater that would be hard to move all the way around to the Port of Anchorage,” including products from the Interior.
HB 229 now goes to the Senate for consideration.
—Kristen Nelson
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