Brazil’s Unigel Group is reported to be planning to start urea production in February, and already is selling February tons, sources told Green Markets this week. Unigel, through its wholly-owned Proquigel Química subsidiary, secured full possession of the leases of Petrobras’ nitrogen fertilizer plants in Bahia (Fafen-BA) and Sergipe (Fafen-SE) in early August last year (GM Aug. 14, 2020).
The contract allows Proquigel/Unigel to control the units for a period of ten years, renewable for another ten years.
Unigel Group CEO Roberto Noronha Santos indicated at the time of the completion of leasing process that the reactivation of the two units was expected to occur as of January 2021 (GM Aug. 14, 2020).
The CEO in May had hoped the plants could be restarted before the end of 2020, and said access to natural gas feedstock with Petrobras and other suppliers was being negotiated (GM May 22, 2020).
Fafen-BA has an installed urea production capacity of 1,300 mt/d, with the ability to sell ammonia, carbon dioxide, and automotive liquid reducing agent (Arla 32). The Sergipe unit has an installed urea production capacity of 1,800 mt/d, and can sell ammonia, carbon dioxide, and ammonium sulfate. In addition to the factories, the leasing agreement with Petrobras is understood have including the subleasing of the ammonia and urea marine terminals at the Port of Aratu, in Bahia, to Proquigel/Unigel.
The leading intermediate chemicals company in Latin America, producing styrenics and acrylics, the Unigel Group is also Brazil’s largest national producer of ammonium sulfate (AS). It has one AS plant with production capacity for 400,000 mt/y, according to Green Markets data.
Unigel expects to be the largest producer of ammonia and urea in Brazil in 2021, according to a statement by New York City-based international law firm Simpson Thacher. Total urea capacity is put at approximately 1 million mt/y. The law firm represented a wholly owned financing subsidiary, Unigel Luxembourg SA, of the Unigel Group in connection with the subsidiary’s offering of US$110 million reopening of a bond offering, just completed. Unigel CFO Daniel Zilberknop told Valor Economico that the money will be used to buy inputs, such as natural gas, and to reduce debt.