Agrium manager upbeat about gas shortage

Posted: Friday, December 20, 2002

KENAI (AP) -- The North Kenai Agrium plant is expected to operate at less than capacity for at least the next two years due to dwindling reserves of natural gas in Cook Inlet. That does not mean North America's second largest nitrogen products facility has any plans of leaving.

Agrium general manager Mike Nugent told the Kenai Chamber of Commerce on Wednesday his company is optimistic new reserves will be found in Cook Inlet.

Nugent noted exploration for new gas fields that is under way. However, it will take at least two to three years before those reserves can be brought on line.

Agrium relies heavily on gas as a main ingredient to produce industrial fertilizers and other nitrogen-based products.

At full capacity, the plant uses roughly 50 to 55 billion cubic feet of natural gas annually.

Although the plant most often is associated with fertilizers, Nugent said, a large portion of Agrium's business comes in the form of resins and materials for making plastics.

The majority of its products are sold to Pacific Rim countries such as Japan, Korea, Australia, New Zealand and Mexico.

Nugent said the ability for Agrium -- the borough's third largest private employer -- to use natural gas to produce Alaska-made products is what makes the North Kenai plant unique among Alaska businesses.

''We are one of the few value-added, natural resource-based industries in the state of Alaska,'' he said.

Nugent said Agrium's presence means new gas producers have a big incentive to find new reserves.

''We bring a steady demand all year,'' he said.

The news he's heard from exploration companies about new reserves has been positive.

''They believe there's some fairly large reserves to be discovered and produced,'' he said.



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