Agrium to continue Kenai operation in '07

Petroleum News

Agrium said Aug. 23 that it has successfully obtained sufficient natural gas supplies to allow for the operation of its Kenai nitrogen facility in 2007.

But the company does expect the plant to “experience an extended shutdown during the winter months due to seasonally higher demand for home heating,” Agrium said in a press release.

“An important consideration in Kenai’s continued operation is the potential future option value due to recent developments in the Cook Inlet that may create longer-term possibilities,” said Mike Wilson, Agrium president and CEO.

Agrium said the extension is not expected to impact its guidance for the second half of the year and is anticipated to provide “only a modest contribution to earnings in 2007 … due to a lower anticipated operating rate and higher average gas price than in 2006.”

The company said the contracts are with “numerous Cook Inlet gas producers and are subject to strict confidentiality provisions.”

The Kenai facility is expected to operate one ammonia and one urea plant at about 75 percent of capacity over the next 12 months. At full capacity they would produce 640,000 tones of urea and the net ammonia capacity would be approximately 280,000 tonnes.