Port of Anchorage could move coal for Agrium

AP Photo/Brian Wallace/Juneau Empire

Agrium Corp.’;s plan to switch its Nikiski fertilizer plant from running on natural gas to coal would initially rely on coal shipped from the Usibelli coal mine at Healy to Anchorage and transferred to barges at the Port of Anchorage.

Agrium’;s project would require about 3 million metric tons of coal yearly. If all of the coal were acquired from Usibelli, it would require the company to approximately triple its current production of 1.5 million tons per year.

Tim Johnson, manager of Agrium’;s “Blue Sky” project, told the Resource Development Council’;s annual convention in Anchorage Nov. 16 that the base case for the project would be purchasing coal from Healy. Johnson also said that coal might also be acquired from a planned new coal mine at Beluga, on the west side of Cook Inlet, if the mine is built.

Steve Denton, Usibelli’;s vice president for business development, said his company is also looking at Port MacKenzie, across Knik Arm, as a place to load barges bound for Nikiski. Port MacKenzie now has facilities for loading bulk commodities. However, to make shipping from the port feasible, a 43-mile rail link would be needed to connect the port with the Alaska Railroad, he said. Costs of a rail spur have been estimated at about $200 million.

Agrium announced the coal gasification project a year ago and has completed an initial feasibility study, Johnson said. If it succeeds, the plan would secure the future of the Nikiski plant, which is now uncertain because of the tightening of gas supply in Southcentral Alaska.

Agrium is now in the front-end engineering design and permitting phase for the project, which is expected to last 18 to 20 months, Johnson said. If the company determines the project is feasible, a decision which could come in 2008. Agrium would then proceed to detailed engineering and construction, with a start-up possible in late 2011, Johnson said.

Donna Boltz, deputy director of the Port of Anchorage, confirmed that discussions have been held with Agrium regarding shipments of coal. The port is now undergoing a major expansion, and once it is completed there will be room for a coal stockpile and loading facility, she said. The expansion plan includes a barge loading dock at the north end of the expanded port which would be suitable for loading coal, if Agrium’;s plan goes forward, Boltz said. A rail spur has been built to the port as a part of the expansion.

“There have been no decisions yet, just an exploration of possibilities,” she said. Denton said about 20 to 40 acres might be needed to stockpile coal.

In Nikiski, Agrium is looking at building the planned gasification and power plants on a 75-acre tract to the south of the existing ammonia and urea plant, Johnson told the RDC. Homer Electric Association would take the lead role in building the power plant, which would be a conventional coal-fired facility.

The power plant is now planned at 190 megawatts with two-thirds of the power needed for the gasifier planned by Agrium. There would be about 70 megawatts available for the regional power grid, Johnson said.

Agrium had initially considered a larger coal-gasification project that would have included an integrated gasification combined cycle power plant that would have produced both ammonia and urea. Agrium, however, changed the plan because it would be less economic than a conventional pulverized coal power plant, and Agrium is now focusing on a process for just urea production rather than ammonia and urea, Johnson said.

The original process would have required 2 tons of coal to produce 1 ton of ammonia, Johnson said. The latest plan would produce 1 ton of urea from 1 ton of coal. Even through there would be less ammonia produced, the new plan is more attractive, he said.

If the project goes ahead it would create a mini-construction boom on the Kenai Peninsula. Construction would take about three years, from 2009 to 2011, and would require 1,100 workers in the first two years and 1,300 in the third year, according to Lisa Parker, Agrium’;s public affairs manager.

If it is successful, however, the Agrium plant would be assured an indefinite lifetime. The company now employs 230 at its manufacturing facility and is the Kenai Peninsula’;s largest employer.

Agrium now uses natural gas as a chemical feedstock in the manufacture of ammonia and urea, but reserves in Southcentral Alaska gas fields are being depleted and Agrium has encountered difficulties in getting enough gas to operate the plant. The company down-sized the plant to use less gas in recent years and has suspended ammonia and urea production this winter because of inadequate gas supplies.

Normal operations will resume in the spring. Agrium has been operating on a series of one-year gas supply contracts. The latest contracts will expire in late 2007.

11/09/2016 - 6:41pm