Agrium dumps Nikiski coal gasification plans; says project not economic

Agrium announced March 13 that it has determined that its proposed coal gasification facility to supply syngas for the company’s fertilizer plant at Nikiski on Alaska’s Kenai Peninsula is not economic.

“The mothball of the facility will be completed shortly,” the company said. Agrium closed its Nikiski fertilizer plant in December because of insufficient supplies of natural gas feedstock for the plant. But in 2004 the company had initiated its Blue Sky project, to investigate the feasibility of converting the plant to use hydrogen generated from the gasification of coal. That project is now defunct.

Escalating equipment and construction costs combined with the economic downturn in North America and worldwide killed the project economics, Agrium spokeswoman Lisa Parker told Petroleum News.

“After three years of working on it and seeing if it was doable, unfortunately we’ve found we can’t advance it any further,” Parker said. “… We haven’t made a decision as to what we will ultimately be doing with the facility at this point. That decision will be made in the months ahead.”

Parker also expressed Agrium’s disappointed that several years of effort in trying to keep the Nikiski fertilizer plant open had come to naught.

“We’re very disappointed,” Parker said. “We have made a very strong effort over the last six-plus years to do everything we can to try to keep this facility operating and providing value back to Alaska. We are disappointed that our efforts were not successful.”

—Alan Bailey