Saudi Arabian Mining Co. (Ma’aden), Riyadh, said its new ammonia-3 plant under construction at Ras Al-Khair on the Kingdom’s East Coast is now “north of 55 percent completed” and is likely to start up at the end of this year-the beginning of 2022, company CEO Mosaed Al-Ohali told analysts at an earnings call on Feb. 10.
Construction of the 1.1 million mt/y ammonia-3 plant began in October 2018 (GM Oct. 26, 2018), and is being built adjacent to the Ma’aden Phosphate Co. and Ma’aden Wa’ad Al Shamal Phosphate Co. (MWSPC) DAP/MAP plants and their associated facilities.
Ammonia-3 is the first unit under construction as part of Ma’aden’s ambitious plans for a third large-scale phosphate complex, “Phosphate 3,” which upon completion will add a further 3 million mt/y of phosphate fertilizer production capacity to Ma’aden’s portfolio.
But according to local media reports this week, citing the company, the output from the ammonia-3 plant would add 1.1 million mt to the Saudi producer’s sales.
Ma’aden originally planned to build Phosphate 3 in phases through to 2025 (GM Dec. 6, 2019). Little has been heard from the company on the project during the past year or so.
Al-Ohali told analysts this week that Phosphate 3 has been “pushed a couple of years beyond 2025.
“One of our objectives is to deleverage and bring our leverage to a situation that allows us to comfortably take the additional borrowing that will be required for Phosphate 3. So we would think that maybe a couple of years, maybe three years, that we will need deleverage to an acceptable level,” he said.
The CEO put the estimated budget for Phosphate-3 at $4.2 billion on completion.
“I don’t think we will not have any serious spend on it within this year or maybe next year. Phosphate 3 is a very good project. So we may just look at maybe innovative way of financing and, providing the required capital. That may give us an opportunity to accelerate it into May 2023 timeframe,” said Al-Ohali.
“This is a huge project, and if we are going to meet first-quarter 2025, we need to be doing something now. We need to do now more than what we are doing. So the best thing to say is that maybe completion is the first quarter of 2027,” he added.
The CEO said one way to do Phosphate 3 was to develop it in two phases: Phase 1, half of the capacity, 1.5 million mt/y, and then another phase of 1.5 million mt/y.
Regarding the company’s two existing phosphate fertilizer operations, Al-Ohali confirmed that Ma’aden Phosphate Co. (MPC) is operating at capacity, even “slightly better than capacity.” MPC has approximately 2.9 million mt/y of DAP/MAP production capacity
Al-Ohal confirmed remediation work continues at the majority-owned Ma’aden Wa’ad Al Shamal Phosphate Co. (MWSPC) facilities, which commenced “commercial” operation of DAP in December 2018. The Mosaic Co. and SABIC own 25 and 15 percent stakes, respectively, in MWSPC.
“As reported earlier, we have gaps to close [at MWSPC] before we reach capacity. We are at around 60 percent to 70 percent capacity currently,” he said.
Al-Ohali confirmed the technical issues are not in a specific location; they include issues with the power and steam generation, which have now been fixed, and issues with the sulfuric acid plant, among others. But he expects to see most of the increased capacity benefits coming in this year and next, and anticipates to exceed the 3 million mt/y phosphate fertilizer design capacity at MWSPC by 2025.