(Reuters) - Incitec Pivot Ltd, Australia’s top fertilizer producer, has lined up affordable gas supply that will allow it to keep its Gibson island fertilizer plant in Queensland state open through 2022, it said on Tuesday.
The company had warned that it might have to shut the plant due to soaring gas prices, but has now lined up supply through a deal with Australia Pacific LNG and pipeline group APA.
The extension of operations at the plant is expected to increase its fiscal 2020 operating profit by about A$5 million ($3.5 million) over its forecast fiscal 2019 figure, the company said in a statement.
The company said in May it expects to achieve fiscal 2019 earnings before interest and tax between A$370 million and A$415 million.
Incitec added that the new arrangements are subject to Australia Pacific LNG (APLNG) obtaining regulatory approval from the Foreign Investment Review Board.
The supply from APLNG will meet the facility’s needs from April 1, 2020 through to December 31, 2022.
Gibson Island comprises about half of Incitec’s Brisbane operations and sends about 550,000 tonnes of fertilisers each year to the company’s customers.
Reporting by Shanima A in Bengaluru and Sonali Paul in Melbourne; editing by Richard Pullin