Newspaper article THE JOURNAL RECORD

Ong Threatens to Cut Fertilizer Plant Service

Newspaper article THE JOURNAL RECORD

Ong Threatens to Cut Fertilizer Plant Service

Article excerpt

Natural gas service essential to prevent a state fertilizer plant from becoming "junk" will totally cease Friday unless ar rangements are made for payment of $4.6 million in bills past due to Oklahoma Natural Gas Co. of Tulsa, warned William Pirtle, vice president of marketing, Wednesday in testimony before the Oklahoma Corporation Commission.

The shut-down is a "trump card" to ensure that ONG receives payment on the arrears if the N-ReN Corp. plant in Pryor, Okla. is sold by its financially troubled parent, a lawyer for the utility said.

All but enough "keep warm" gas to run one boiler at the plant to thaw frozen pipes was shut-off at 5 p.m. Wednesday, Pirtle said.

"We have no other course of action," Pirtle said. "We're going to shut it down cold. . .It is my understanding that if the plant is shut down cold for any period of time it is essentially junk."

ONG asked the commission for permission to terminate service to the N-ReN plant after it learned the facility was being sold. The commission is expected to make a decision shortly.

The sale would have left the utility without recourse in collecting the $4.6 million owed it by N-ReN since the utility is an unsecured creditor, Pirtle said.

It became apparent that N-ReN intended to sell the plant and not pay its debt to ONG during a meeting between officials of the two companies on Dec. 17, Pirtle said.

ONG demanded payment but reached an agreement on Dec. 24 to supply the plant with gas as long as N-ReN made daily payments for current consumption of gas by wire transfer.

N-ReN's bank group led by Bank of America, Chicago and including First National Bank & Trust of St. Paul, Minn.; Central Trust of Ohio and Fourth National Bank of Nashville, Tenn., agreed to permit"draws" of an additional $1 million under its credit line and collateral formula, said E.L. McCutcheon, division manager of N-ReN's Cherokee Division in Pryor.

Because the banking group wants to "get away" from loans to petrochemical companies, McCutcheon said, cash flow from Pryor and other plants operated by Cincinati-based N-Ren are funneled directly into the company's bank group. …

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