Agrium evaluates plant as gas situation improves
Agrium Corp. is doing an assessment of facilities and equipment at its closed ammonia and urea fertilizer plant at Nikiski, and will have about 50 people at work at the facility, mostly contractor employees, through late summer and early fall.
The company shut down the plant in 2007 when Cook Inlet gas supplies tightened, but the uptick in exploration and new development work has encouraged Agrium to take a look at whether the plant could be reopened, said Steve Wendt, the company’s manager for the facility.
“At this point Agrium is only evaluating the state of existing equipment. The company is not making any decision whether to resume operations at the facility at this time,” Wendt said.
What’s most important is whether enough new gas is available, and Agrium understands that the needs of regional utilities must be met first, he said.
But if there is an opportunity the company wants to be ready, and that means taking at close look at the plant and the condition of its equipment.
“Shutting down the plant and laying off employees was a painful process for us, but we have continued to be interested in Alaska and have been monitoring the situation,” Wendt said.
“We’ve really been encouraged by all the new industry activity. We know that utility needs will have to be 100 percent satisfied before there would be any room for Agrium (in the gas supply market) but we believe Hilcorp has gone a considerable way in meeting the regional utility needs. There are now several other players exploring in the Inlet as well as talk of a gas pipeline from the North Slope.”
“There may be opportunities for us out there, although it will probably not be in the near term,” Wendt said.
For now, Agrium has retained Dresser Rand, a Houston-based engineering company with local offices, and GLM Corp., a Kenai firm, to do inspections of rotating and generation equipment.
Arctic Slope Energy, the Anchorage-based oil services division of Arctic Slope Regional Corp., will begin work July 1 on inspections and evaluations of fixed equipment, such as vessels and tanks, Wendt said.
The work is expected to last through October, he said.
Agrium’s work is focused on three newer process units that were built more recently than three units built when the plant was first opened. If those units were restarted the plant would require about 80 billion cubic feet of gas per day, or about 25 billion cubic feet of gas per year.
Until it was closed in 2007 the plant was one of the major employers and taxpayers on the Kenai Peninsula, and had operated since 1969 when it was built by Collier Carbon and Chemical, a subsidiary of Union Oil Co. of California.
Unocal sold the plant to Agrium in 2000. Agrium is a Calgary-based company specializing in fertilizer manufacturing, with plants in several locations in North America.
When it operated, the Nikiski plant was Agrium’s largest and was also one of the largest fertilizer plants in the world, selling its products mostly overseas.