Agrium evaluating the possibility of re-opening fertilizer plant

In response to an upsurge in gas development in Alaska’s Cook Inlet region Agrium Inc., an international supplier of agricultural products, is looking into the possibility of re-opening its fertilizer plant at Nikiski on the Kenai Peninsula. The company mothballed the plant in 2007 because of a supply shortage of natural gas from the Cook Inlet basin, as gas production in the region declined. Gas is the primary feedstock for fertilizer production at the plant.

“Agrium is evaluating a potential re-start of the facility if sufficient natural gas was available in the future. It has been ‘kept warm’ over the years,” Richard Downey, Agrium vice president for investor and corporate relations, told Petroleum News in a March 10 email. Downey said that drilling activity has accelerated in the Cook Inlet area but that there is still not sufficient gas available for a restart.

In a letter to the Regulatory Commission of Alaska on March 4, commenting on Cook Inlet Energy Inc.’s proposed takeover of Anchor Point Energy, operator of a Kenai Peninsula gas pipe line, Steve Wendt, manager of the Agrium plant, characterized his company as a consumer of gas in the state of Alaska that relies on a well-maintained pipeline infrastructure.

“Agrium also stands to benefit from initiatives that are designed to deliver additional energy resources from the Cook Inlet to natural gas consumers in Alaska in an effective and efficient manner,” Wendt wrote.

The Kenai Peninsula plant uses natural gas to generate urea and ammonia, both of which can be shipped out of Alaska from the dock at Nikiski. The viability of the plant presumably depends on the pricing of Cook Inlet gas and on fertilizer prices, as well as on the availability of sufficient gas feedstock.

—Alan Bailey