A new tax incentive would be a “factor” in Agrium’s decision to reopen in North Kenai, but lawmakers expressed skepticism yesterday that the state can afford the credits.
Nikiski Speaker Mike Chenault’s HB 100 was also seen as unnecessary by some Democrats on the House Finance Committee.
Adam Diamond, Agrium’s Governmental Relations Manager, said the credits would help influence the company’s decision to invest the $275 million needed to restart the plant…
Diamond: “If this incentive bill goes through, I can’t say it would make or break the decision but it absolutely would be a positive factor in the decision, so we’re hopeful that that will actually go through. It would generate revenue for the state as well.”
Diamond said the credit is contingent upon the plant reopening and purchasing gas.
Diamond: “One of the big hurdles is still going to be securing enough gas long term at a competitive price.”
The plant has been hiring contractors to do initial engineering work, but Diamond said those are not permanent positions. Managers say it’s possible the plant could reopen as early as the summer of 2017 if the economic conditions are right.
Chenault argued that the five-year credit would result in an economic shot in the arm for Nikiski to the tune of hundreds of millions of dollars. The plant would hire 140 full-time permanent salaried positions.
The credits could save Agrium $3-4 million per year on taxes, according to an estimate from the Department of Revenue.
Chenault said the plant’s demand for natural gas would also spur further exploration and a better guarantee for Alaskan LNG markets.
The bill was ultimately passed out of committee and heads to a floor vote.