11 Jul 2012

NZ-sourced urea chews through gas reserves

6:35 am on 11 July 2012

Ballance Agri-Nutrients says it has cut a deal for enough natural gas to keep the country's only ammonia urea manufacturing plant running for the next eight years.

After operating the Kapuni plant for 20 years, the fertiliser co-operative has signed contracts for the supply of about seven petajoules of gas each year until 2020.

That's about equal to the total domestic gas supply for the North Island.

Ballance also has a new air discharge resource consent from Taranaki Regional Council, that's valid until 2035, and it expects to have water consents renewed later in the year.

The plant is producing about 260,000 tonnes of agricultural urea per year, just under half of New Zealand's total market for the nitrogen fertiliser.

Chief executive Larry Bilodeau says producing urea domestically is saving about $100 million per year in foreign exchange required to fund a similarly volume of imports.

According to Rabobank's Fertiliser review, urea demand is strong this year, with imports up 18% in the first quarter of the year.