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Vol. 16, No. 9 Week of February 27, 2011
Providing coverage of Alaska and northern Canada's oil and gas industry

Oil Patch Insider: Rumors of Agrium plant to Africa; Itta sheds anti-development stance

Is the Agrium fertilizer plant on the Kenai Peninsula headed for Nigeria?

That strange question began circulating around the oil patch after Dave Harbour, a former Regulatory Commission of Alaska commissioner, posted a report from Heavy Lift & Project Forwarding International on his long-running blog Northern Gas Pipelines.

According to the report, Fairstar Heavy Transport NV, a Dutch shipping company, recently “signed a Letter of Intent to provide a total land and marine logistics solution to transport 115 modules as well as related equipment from the Agrium Kenai Nitrogen Operations, comprising Plants 4, 5, and 6, from Kenai, Alaska to Ossiomo, Nigeria.”

The report from the trade publication said the $25 million shipping contract was set to be finalized in March and would require two heavy lift vessels — the Fjord and the Fjell — to mobilize to Alaska in early July and complete the trip to Nigeria by December.

Agrium acknowledged the report, but wouldn’t say whether or not it’s true.

“Agrium continues to look at all our options for the Kenai facility, but nothing is finalized yet,” Paul Poister, manager of U.S. government relations, told Petroleum News.

After posting his original report, Harbour followed up with an e-mail from Robert J. Roest of Mammoet USA, South Inc., one of the reported contractors on the shipping project.

Roest said his company would be bringing a “large crawler crane into the area,” but would only be using the piece of equipment for Agrium for about one month, adding that he had a prospect for another job “very close by” that would take up another week.

“My idea is to present the opportunity of a large machine against a very competitive rate to other heavy industries in the area,” he wrote, suggesting “petrochemical plants and refineries, power generation, mining operations, shipbuilding and fabrication yards.”

The equipment could “manipulate 300-350 ton loads with relative ease,” Roest wrote.

“The way I see it is that this opportunity presents a significant cost saving for plant operators as opposed to bringing a machine just for one project,” he wrote. “And yes, I get more business out of it; it is a cliché, but it would be a sure win-win for everybody.”

For now, though, Alaska will have to wait and see what happens.

—Eric Lidji

Itta largely sheds anti-development stance for offshore drilling in Arctic

The Feb. 16 edition of Barrow’s Arctic Sounder carried a headline that would have shocked Alaskans seven years ago at the beginning of Edward Itta’s first term as mayor of the North Slope Borough.

The headline read, “Mayor Itta: Dwindling oil opportunities force rethinking of anti-development stance.”

And re-thinking is obviously what he is doing, having repeated what he told the newspaper at a Feb. 17 House Finance Committee in Juneau.

Itta was there with others, including Rex Rock Sr., president and CEO of ASRC, to participate in a discussion on federal regulatory issues affecting economic development in Alaska.

Although Itta’s reason for being more open to offshore oil development was attributed to his constituents being under attack by the Obama administration, he said it was also because of the work Shell has done with his people and their representatives.

“Shell has come a long ways to addressing the critical concerns of our communities — and sometimes above and beyond the federal requirements,” he told committee members.

Itta said he was “disappointed” when Pete Slaiby, Shell vice president for Alaska operations, called him Feb. 2 to tell him Shell was once again postponing its Beaufort Sea drilling because of continuing permitting uncertainty with the U.S. Environmental Protection Agency.

“I think Shell has earned the right to start their exploration program,” Itta said.

He said he has come to the realization that for the Inupiat people of the North Slope “resource development and economic development are one and the same. The economy in our region … is all driven by oil. … In a sense we’re more dependent on oil than the state. We need economic development to sustain our subsistence way of life; that’s our reality now.”

—Kay Cashman

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