Agrium Inc. has not totally given up on its Kenai nitrogen complex, citing the possibility that new gas pipelines could bring gas to the facility. However, those would be more long-term, rather than short-term, solutions. An Agrium representative, Lisa Parker, recently testified before a legislative hearing on the Alaska Gasline Inducement Act, noting the loss of the plant, which employed 300 and was one of the largest nitrogen plants in North America. Under the Act, the state can give up to $500 million in inducements to assist a new gas pipeline.

Currently, the Legislature is weighing a proposal by TransCanada Corp. to build a pipeline from Alaska through Canada to the Lower 48 states. Other pipeline proposals include the Denali – The Alaska Gas Pipeline LLC, owned by BP and ConocoPhillips, which would also take gas to the Lower 48, as well as two projects that would take gas to southcentral Alaska – a 370-mile spur line by Alaska Natural Gas Development Authority (ANGDA), and a 690-mile bullet line by Enstar Natural Gas Co. Agrium could benefit from any of these pipelines as long as there is a spur to the Kenai area.

Enstar, in particular, has noted the benefits to Agrium should its bullet project proceed. It would want to sign Agrium up as a customer early on should it decide to proceed. Likewise, Agrium told Green Markets that it would have to have a long-term source of gas in order to again ratchet up production after having let go 300 people and mothballing its facility.

The U.S. Department of Energy announced last month that it once again had approved LNG exports from Kenai to Japan. The permit by the Kenai LNG plant, owned by ConocoPhillips Alaska Natural Gas Corp. and Marathon Oil Co., was to expire in January 2007. The two companies sought and obtained a two-year extension through March 31, 2011. The companies were given permission to export an equivalent of 98.1 billion cubic feet of natural gas.

Parker told Green Markets that this gas could have kept Agrium’s Kenai nitrogen plant in operation. Agrium was opposed to the extension of the permit. Earlier this year Alaska Governor Sarah Palin (R) (GM Jan. 7, p. 13) gave support to the LNG extension, citing company promises to assure that local utilities would receive adequate supplies. In addition, the plant owners agreed to develop additional natural gas reserves in Cook Inlet and allow third parties the opportunity to monetize their gas production though the LNG plant.

In the meantime, Agrium has opted out of any plans to do a coal gasification project for Kenai.

MagIndustries Corp., Toronto, reports that its subsidiary, MagMinerals Potash Corp., has reached a 12-year marketing agreement with Ameropa Group for the sale of granular potash derived from MagPotash’s Kouilou project in the Republic of Congo. The marketing agreement provides for the supply of 1.2 million mt of granular potassium chloride per year (representing both phases of MagPotash’s Kouilou project), to be sold by Ameropa. The initial supply of 600,000 mt/y from phase I of the project is anticipated to begin in the first quarter of 2011, with the remaining 600,000 mt/y anticipated to commence by the first quarter of 2013.

At the same time, Ameropa will invest C$70 million in MagPotash securities at a price of $5.00 per security. The offering will be structured in a manner similar to that used for the financing, which was completed in April 2008. Ameropa will acquire 14,000,000 common shares in MagMinerals Holdings Corp. MagHoldings will subsequently use the proceeds from the offering to subscribe for $70,000,000 of subscription receipts in the capital of MagPotash at a price of $5.00 per subscription receipt.

In addition, Portonovo, which is controlled by French businessman Hubert Pendino, president, director general of Socofran, will invest $35 million on the same terms as set forth above.

Of the $105 million proceeds from the offerings, $75 million will be applied to the construction of phase 1 of MagPotash’s Kouilou potash project, while the remaining $30 million will monetize a portion of MagIndustries’s investment in MagPotash. These proceeds will be used by MagIndustries Corp. for general corporate purposes, principally the working capital needs of MagForestry, MagEnergy, and MagMetals. The investment is expected to close on or about July 11, 2008.

Subsequent to the strategic investments by Ameropa and Portonovo, and subject to the previously announced MagPotash reorganization, including the exercising of the subscription receipts, MagIndustries will hold 94 million shares (a 67 percent interest); Ameropa and Portonovo will hold 14 million and 7 million shares (10 percent and 5 percent interests), respectively; and the subscribers to the financing completed in April 2008 will hold an aggregate of 25,250,000 shares (a 18 percent interest) in MagPotash.

Founded in 1948, Ameropa is a privately owned, Swiss-based international grain and fertilizer trader.

Hubert Pendino arrived in Congo in 1968. His company has developed into one of the country’s largest building and infrastructure construction companies.

In connection with the above issuances, MagPotash has agreed to use its best efforts to cause a liquidity event to occur before Oct. 3, 2008. The event will involve (i) the completion of a reorganization to, among other things, cause MagMinerals Inc. (Barbados) (MagBarbados) (the entity which holds the potash assets) to become a wholly-owned subsidiary of MagPotash, (ii) causing MagPotash to become a reporting issuer in one or more provinces of Canada, and (iii) causing the common shares of MagPotash to become listed on a Canadian exchange.