Agrium Inc., Calgary, has asked the Alaska Industrial Development and Export Authority (AIDEA) to consider financing the restart of part of its Kenai Nitrogen Operations (KNO), located in Nikiski, Alaska. Agrium applied for an air permit last fall (GM Nov. 4, p 10; Oct. 14, p. 1), and due to the recent development of gas reserves in the Kenai area, believes that the plant may once again be economical. It closed the complex in 2007 due to limited gas supplies.
Agrium, using one of its U.S.-based subsidiaries, Agrium U.S. Inc., a Colorado corporation, told AIDEA the restart of part of the facility could cost $200 million. The money would go to refurbish and replace equipment and meet environmental requirements for the restart of one ammonia/urea production train.
Currently Agrium is looking at bringing up a 2,250 st/d ammonia plant and a 2,050 st/d urea plant (plants four and five, respectively). Also at the site are another ammonia plant at 1,950 st/d and a urea plant at 1,550 st/d (plants one and two).
In order to bring up the first two plants, Agrium will need to contract for 80 MMCFD (million cubic feet per day) of natural gas from Cook Inlet producers for a term of at least five years at commercially reasonable prices.
Agrium is willing to enter into a Cost Reimbursement Agreement with AIDEA under which Agrium would reimburse the authority for the cost of activities in analyzing whether and how to proceed with the project. AIDEA would review Agrium’s engineering and business plans as well as do an appraisal review of the KNO facilities. The Cost Reimbursement Agreement would not exceed US$100,000.