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Governor Applauds Resolution in Agrium, Unocal Gas Dispute


July 24, 2004

Juneau, Alaska - Governor Frank Murkowski said Friday an arbitration panel decision in the natural gas supply dispute between Agrium Inc. and Unocal Corp. would help bring some stability to the Kenai Peninsula economy.

"I appreciate both companies working together through the process to arrive at a fair answer, and I am heartened to know that Agrium will be able to run its Kenai fertilizer plant with an increased gas supply,"
the Governor said.

"Agrium's continued operations are essential for the area's economy, and adequate natural gas supplies are key to Agrium's operations," he said. The company employs 230 workers and last year accounted for almost 5 percent of the Kenai Peninsula Borough's total property tax revenue.

The companies today reported in separate announcements that an arbitration panel Thursday determined Unocal owes Agrium $36.5 million plus interest for failing to meet its contractual obligations to supply
natural gas for the fertilizer plant between July 2002 and April 2004. Unocal sold the plant to Agrium in 2000 and contracted to supply gas from its Cook Inlet wells.

The arbitration panel also ruled that Unocal must supply more gas to the Agrium plant than it had proposed for the next few years.

"I know it will take more than just this settlement to ensure an adequate, long-term gas supply for Agrium, but this is a healthy start in providing certainty for the company and its workers," the Governor said. "Meanwhile, the state continues working with producers and explorers to bring more Cook Inlet gas to market."

The value of Agrium's exports last year topped $200 million, more than 7 percent of the state's total export business.

"Agrium is a big player in world markets and a major force in Alaska's economy, and I congratulate Agrium and Unocal for working out their problems in everyone's best interests," Murkowski said.


Source of News Release:

Office of the Governor
Web Site


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