Kapuni urea plant gas supply has received short-term relief as Ballance Agri-Nutrients secured gas for operations through March this year. The temporary Kapuni urea plant gas supply agreement allows continued production at the 260,000 t/yr facility amid rising energy costs and declining domestic reserves.
Ballance said it has relied on short-term gas arrangements since its long-term supply contract expired on 30 September. The Kapuni urea plant depends entirely on natural gas as both feedstock and fuel, making production costs highly sensitive to gas price volatility.
High gas prices and shrinking local reserves have significantly increased the cost of domestic urea production. Without a secure gas supply, the Kapuni plant would face the risk of shutdown, the company noted.
This marks the second short-term gas supply deal secured by Ballance for the Kapuni facility. The company is actively pursuing both short- and long-term affordable gas supply agreements to ensure operational stability.
To mitigate supply risks, Ballance has increased imports of urea and other nitrogen fertilizers to cover demand during the autumn months from March to May, in case production at the Kapuni plant is disrupted.
According to Statistics New Zealand, New Zealand’s urea imports rose to 466,500 tonnes during January–November, compared with 460,535 tonnes in the same period last year.
The availability of affordable and reliable gas remains a critical issue for New Zealand’s fertilizer sector and is expected to feature prominently in the country’s general election scheduled for 7 November.
Ballance did not disclose the volume or source of the newly secured gas supply.
