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Timely bullet line could save Agrium plant
Alan Bailey Petroleum News
Could Enstar’s concept of a bullet line to deliver natural gas from northern Alaska to Southcentral Alaska bring salvation for Agrium’s fertilizer plant at Nikiski on the Kenai Peninsula? Agrium has mothballed the plant because of a lack of what it says are adequate gas supplies from the Cook Inlet region.
As reported in the March 16 edition of Petroleum News, Enstar has proposed a 500 million cubic-feet-per-day gas line to Anchorage from the area of the Foothills where Anadarko Petroleum Corp. is exploring for gas. But Enstar has said that achieving low tariffs on such a line would depend on having industrial customers such as Agrium for the gas.
Agrium has expressed an interest in Enstar’s bullet line idea, Enstar spokesman Curtis Thayer told Petroleum News on March 17. In fact, since Enstar presented its bullet line idea to the Senate Resources Committee on March 12 many organizations have contacted Enstar, Thayer said.
“Since our presentation in Juneau our phone has not stopped ringing,” Thayer said.
However, Thayer emphasized that at this stage Enstar is in the process of seeking letters of interest and letters of intent, rather than commitments such as memoranda of understanding.
Agrium: time of the essence On March 17 Agrium spokeswoman Lisa Parker confirmed that Agrium is interested in the bullet line concept.
“It is an option that we should consider in the future,” Parker said.
Parker said that Agrium has also discussed gas supplies with companies that have leases on the North Slope.
Time is of the essence, however. The longer the fertilizer facility remains idle, the more difficult it would be to restart because of deterioration of the plant — a serious proposal for the bullet line would need to come forward in about the next couple of years, Parker said.
“The longer that facility just sits, the more difficult it is to restart,” she said.
And with the Nikiski facility having laid off its employees, hiring employees for a restart would require a long-term assurance of the natural gas feedstock for fertilizer production.
“For this facility to ever restart you would need a long-term commitment to supply gas,” Parker said.
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