Agrium’s Blue Sky project nears Phase II

Posted: Tuesday, May 02, 2006


  Lisa Parker, Government & Community relations for Agrium USA updates the Kenai Chapter of the Alliance on the Coal gasification project

Lisa Parker, Government & Community relations for Agrium USA updates the Kenai Chapter of the Alliance on the Coal gasification project

Until Agrium was able to secure a continued supply of natural gas last year they had announced that the plant would shut down in October 2005. With the news that they had been successful in acquiring a continued supply of gas through October 31, 2006, came the additional announcement that Agrium had begun a Blue Sky project to study the feasibility of building a plant that would continue to produce ammonia and urea from coal. The project would use proven coal gasification technology to transform Beluga coal into feedstock for Agrium’s Kenai Nitrogen Operation complex and would allow for the continued long term operation of the Kenai facility. Even with the supply of natural gas acquired last year, the plant had to shut down operation in January to free up supplies for domestic use. Something that has never happened before in the plants nearly 40 year history.

As phase one of the Blue Sky project nears completion, Agrium is still looking for a continued supply of natural gas to continue its operations. Lisa Parker, Government and Community relations director for Agrium USA told the Kenai Chapter of the Alliance last week that they are presently talking with all the producers of natural gas in the Cook Inlet, “We have issued a request for proposal and we are trying to negotiate some contracts to see if we can get enough gas to keep operating plant past October 31st of this year. Sometime this summer we plan to announce if we will be proceeding with Phase II of the coal gasification project,” reported Parker.

If successful with the transition to coal gasification Parker estimates that it would be about five years before the plant would be able to start production of urea and ammonia from coal. Once the transition was completed the plant would no longer have need of natural gas for feedstock and would be solely dependant upon coal for production. The new facilities would require some 80 acres of additional property and be second only to the Trans Alaska Pipeline for construction projects in Alaska. It is estimated that when completed the project would double the value of the present facility. If the transition project goes forward it is likely there will be several years that plant will not be producing product, “If it was a perfect world and if we were able to secure a continued gas supply until we started construction on the new facility, our employees would be able to transition to construction jobs until the new plant started production,” said Parker, “But right now we don’t have the answer. The published target date for completion for production is 2011-2012.

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