Agrium Well Positioned in the Face of Record Natural Gas Prices

Business Wire, Dec 14, 2000

Business Editors

CALGARY, Alberta--(BUSINESS WIRE)--Dec. 14, 2000

Agrium Inc. (NYSE:AGU) (TSE:AGU.) ("Agrium") announced today it has reduced production at five of its North American facilities in response to the rising natural gas prices.

These gas price levels are unprecedented and Agrium believes they are unlikely to be sustained during the intermediate term. However, to reduce the impact of consuming unhedged natural gas the Company has continued to keep its Redwater #1, Alberta and Finley, Washington plants down and have reduced rates at Joffre, Alberta, Borger, Texas and Fort Saskatchewan, Alberta by approximately 50%, 30% and 20% respectively. These curtailments amount to approximately 17% of Agrium's total nitrogen production (2,400 tonnes per day). As a result, the Company is 75% hedged for 2001 at prices 67% below the current one-year NYMEX strip price. To better position itself to serve customers, Agrium will augment the production losses as a result of the curtailments with product purchases and trades in the global arena.

Agrium Inc. is a leading global producer and marketer of fertilizer and a major retail supplier of agricultural products and services in both North America and Argentina. The Corporation produces and markets four primary groups of fertilizers: nitrogen, phosphate, potash and sulphur. The Corporation's strategy is to grow through incremental expansion of its existing operations and acquisitions as well as the development, commercialization and marketing of new products and international opportunities.