X-Message-Number: 21910
From: "Mark Plus" <>
Subject: Fertilizer plant closes, high gas prices blamed
Date: Sat, 07 Jun 2003 17:33:26 -0700


Fertilizer plant closes, high gas prices blamed
By Richard Thompson

June 7, 2003

PCS Nitrogen indefinitely shut down its Millington plant Wednesday, leaving 
its 130 workers in limbo.

No one has been laid off, said John Hunt, general manager of the plant at 
the corner of Old Millington and Rust roads.

"Everybody's still working their regular schedules," said Hunt, adding that 
workers are idling the plant in order to restart it again one day.

Yet no one knows when that day will come.

That depends on the price for natural gas, the primary raw material used at 
the facility, which makes ammonia and urea - a nitrogen-rich organic 
compound - used in fertilizers.

Natural gas prices have more than doubled compared with a year ago.

On Friday, the Henry Hub spot price for natural gas was $6.30 per million 
British thermal units - the standard measure of heat energy; but a year ago, 
the price was $3.18 per million BTUs.

Tom Pasztor, director of corporate and government relations for Potash Corp. 
of Saskatchewan Inc., which bought the Millington facility in 1997, said the 
price of natural gas is rising faster than the price at which the company 
can sell its product.

The Henry Hub natural gas price for next-day delivery has risen 20.2 percent 
since the start of May.

"We simply can't run the plant in Memphis if every ton we produce we lose 
money on," he said.

When natural gas prices go down, Pasztor said, "Yes, absolutely" the plant 
would re-open.

W.R. Grace & Co. built the fertilizer plant between 1953 and 1954, and 
operated it until 1989. That's when the plant was sold to Western Branch 
Holding Co. (Nitrex). Nitrex sold it in 1990 to Arcadian Corp., which sold 
it to Potash.

Potash is the world's largest fertilizer company.

- Richard Thompson: 529-2346

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