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Legislators nix Agrium from tax credit bill

Posted: April 23, 2014 - 11:13am

Lawmakers approved a tax credit bill for Alaska refineries during deliberations Sunday night, but excluded the Agrium Corp. fertilizer plant in Nikiski from the plan.

House Bill 287 was originally introduced by Gov. Sean Parnell to aid in-state refineries. As passed, companies may receive 40 percent of “qualified infrastructure expenditures incurred” which includes “in-state purchase, installation or modification of tangible personal property for the in-state manufacture or in-state transport of refined petroleum products or petroleum-based feedstock.”

House Speaker Mike Chenault, R-Nikiski, proposed an amendment to include Agrium during a Rules committee meeting last week by adding the words “hydrocarbon processing facility” as a part of qualified infrastructure.

Agrium is considering reopening its Nikiski location, which stopped producing fertilizer and ammonia from natural gas in 2007. The restart is estimated to cost $200 million.

Chenault said he’s “not real happy” that the bill passed without Agrium.

“It maybe would have helped with bringing Agrium back,” Chenault said. … “We’re going to continue to work with Agrium to see if there’s something that, if we need to do it, that it helps them and brings back those jobs to our community.”

He said lawmakers excluded Agrium because they didn’t want to jeopardize the extension of the Tesoro Corp. royalty oil contract and the bill also was becoming “a Christmas tree.” 

He said other amendments that could have been proposed were left out because they would have and made the bill “too top heavy” causing it to fail.

Steve Wendt, manager of the Nikiski facility, said being excluded from the bill is “disappointing.”

Wendt said Agrium will continue to work with the state and look for opportunities to move toward reopening the facility.

“We’ll work the project (regardless) and see where it comes out,” Wendt said.

Wendt said the project not only has to be externally economically positive, it also has to compete against other projects within Agrium.

“So incentives like this can benefit you in both those arenas,” he said. “So that’s why it was disappointing not to get it through because the company, even if it is an economically viable project, if there are better internal projects, then they’ll be the ones that are selected.”

He said currently the project is scheduled to go before the board for approval at the end of the year or in early 2015. Working with that timeframe, the company would like to have details of the project, including any incentives from the state, put together by September or October.

“(Agrium was) an important part of our community,” Chenault said. “They still are and the potential is there. We’re going to continue working with them in every aspect that we can to try to bring about the restart of that facility.”

Kaylee Osowski is a reporter for the Peninsula Clarion. She can be reached at kaylee.osowski@peninsulaclarion.com.

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