Agrium reconsiders Nikiski plant, but needs natural gas

  • Thursday, October 13, 2016 9:11pm
  • News

JUNEAU (AP) — Owners of shuttered fertilizer plant in Nikiski have taken steps to reopen the facility but face the hurdle of obtaining a reliable supply of natural gas.

Agrium’s Nikiski plant was the second-largest producer of ammonia and urea before the company in 2007 announced it would be decommissioned.

Reopening would add hundreds of jobs to the Kenai Peninsula, Alaska’s Energy Desk reported. Agrium in 2015 obtained air-quality and pollution permits for the plant. The hope for a jolt to the economy was bolstered when Agrium this year sought a permit to discharge waste from the Nikiski plant.

All three permits are required for the plant to reopen but finding a large, steady supply of natural gas remains a challenge. The company has been in talks with Cook Inlet natural gas producers, Agrium manager of government relations Adam Diamond said.

“We’re talking volumes that are large volumes,” Diamond said. “One half of the plant uses 80 million cubic feet of gas a day.”

Cook Inlet natural gas discoveries in the last five years piqued the company’s interest, Diamond said.

“There’s still, you know, ‘We believe there’s X amount of gas in the ground.’ But that’s very different than, there’s X amount of gas flowing through the pipeline,” Diamond said.

Reopening the plant would cost Agrium an estimated $200 million. In the last legislative session, House Speaker Mike Chenault, R-Nikiski, helped push through a bill that would give Agrium a tax break if it uses gas from a state lease.The company has proposed reopening two of its four production lines and hiring about 140 people. A larger natural gas supply could mean more production and another 100 jobs.

“When they were running at their peak performance, they were employing about 400 employees,” Chenault said.

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