Three weeks ago, Agrium Inc. investors were being advised that the North Kenai plant would cease operations Oct. 31 if a new supply of natural gas was not found.
As recently as lunchtime Wednesday, Plant Manager Chris Sonnichsen said there was no news to report otherwise.
Late Wednesday afternoon, however, Agrium’s headquarters office in Calgary, Alberta, Canada, issued a news release stating the company “has successfully obtained sufficient natural gas supplies to allow for the operation of its Kenai nitrogen facility in 2007.”
Kenai plant spokesperson Lisa Parker said late Wednesday, operations would continue through Oct. 31, 2007.
The company expects the plant to shut down for an extended period during the coming winter as natural gas demand increases to accommodate home heating needs, according to the press release.
Parker said the anticipated shutdown would not mean any layoffs. The plant employs 150 people.
“From November through springtime, (operations) will be weather dependent,” she said.
The news release said the one-year extension of operations in North Kenai “is not expected to impact Agrium’s guidance for the second half of the year.”
Parker said that refers to the corporation’s “forward-looking statement” issued earlier this month advising shareholders of expected financial performance in the upcoming quarter.
The extension “is anticipated to provide only a modest contribution to earnings in 2007,” the news release states.
The Agrium plant is expected to operate at 75 percent of capacity over the next 12 months, with production continuing at one of its two ammonia plants and one of two urea plants.
During an Alaska Oil and Gas Association 40th anniversary celebration luncheon at the Challenger Learning Center of Alaska on Wednesday in Kenai, Sonnichsen told the audience of industry officials and civic leaders that the plant has not operated all four plants since 2001.
He also said the company has just completed the feasibility study of its Operation Blue Sky project, which would extract coal from the west side of Cook Inlet and convert it to gas for use in the fertilizer plant.
Parker said the company will decide next month whether to proceed to phase two.
“Phase two is work on the front-end engineering and design and getting into environmental permitting,” Parker said.
She did not say exactly when in September the decision would be made.
In the news release, Agrium’s President and Chief Executive Officer Mike Wilson thanked Kenai plant workers for their dedication and thanked the state and Gov. Frank Murkowski for helping the company keep the plant open.
“We’re very glad to be continuing to operate and remain in the community,” Parker said. “Part of the reason for continuing is because of the faith and confidence in the employees here and the dedication they’ve shown. It’s an awesome group.”
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