Agrium and Northern Lights sign MOU for long-term low-cost feedstock

20-Jul-2006

Agrium Inc. has entered into a non-binding Memorandum of Understanding (MOU) with the Northern Lights Partnership for the supply of hydrogen and other products from a proposed Northern Lights' heavy oil, or bitumen, upgrader and gasification facility to Agrium's Redwater, Alberta nitrogen and phosphate operations. Low-cost hydrogen from the gasification facility would replace natural gas as the feedstock for Agrium's Redwater, nitrogen facility. Northern Lights Partnership is a partnership between Synenco Energy Inc. and SinoCanada Petroleum Corporation.

"We are excited about the opportunity to capitalize on the unique Alberta oilsands resources, including obtaining a new, stable, long-term, low-cost source of raw materials for our Redwater nitrogen, phosphate and sulphate facility. We believe this project is an excellent example of how we can work with industry partners to take low-grade by-product hydrocarbons and add value for the environment and local economy. This project also illustrates our continued focus on enhancing Agrium's competitive cost position," said Mike Wilson, Agrium President and CEO.

Northern Lights' proposed bitumen upgrading process creates asphaltenes as a by-product, which in turn would be used as a feedstock for gasification and the production of hydrogen and other products. The MOU provides a framework for Agrium and Northern Lights to negotiate a long-term supply contract, whereby Agrium would obtain hydrogen, nitrogen, carbon dioxide and by-product sulphur. Hydrogen prices would not be tied to NYMEX or AECO natural gas prices and would therefore be more stable and predictable. Plant modifications would need to be made at the Redwater nitrogen facility in order for it to use a hydrogen feedstock, primarily to construct infrastruture and utilities to tie-in the two facilities. By-product sulphur would be supplied at no cost for production of phosphate and ammonium sulphate. Start-up of the Northern Lights Upgrader is anticipated for late 2010 and would be located adjacent to Agrium's Redwater facility.

https://www.chemeurope.com/en/news/56484/agrium-and-northern-lights-sign-mou-for-long-term-low-cost-feedstock.html