Swiss-based Proman AG’s proposed nitrogen project in Topolobampo, Sinaloa, in Mexico advanced this week with the July 20 announcement by Mexico’s state-owned energy utility Comison Federal de Electricidad (CFE) that two of its subsidiaries have signed a 15-year natural gas contract (81 billion Btu per day) with Gas y Petroquimica de Occidente (GPO), a subsidiary of Proman, to supply the future fertilizer plant.
CFE said the construction and development of the fertilizer plant represents benefits such as a boost to foreign investment of approximately US$5 billion, as well as 800,000 mt/y of fertilizer production to guarantee food self-sufficiency in northwestern Mexico, in accordance with the policy outlined by President Andrés Manuel López Obrador to boost national fertilizer production. It added that the new plant will create 2,500 direct jobs and 7,500 indirect jobs during the construction, and pull in some $2 billion for CFE over the life of the contract.
While Proman had not responded by press time, the company has been working its way through Mexico’s regulatory and legal system for several years (GM Oct. 18, 2019). In the past, initial production was put at 770,000 mt/y of ammonia and 700,000 mt/y of urea.
In a statement on July 15, López Obrador said the legal issues pertaining to the plant had been resolved, and that “we want to do the same thing in the Gulf, promote at least two large plants to produce fertilizers.”
In his July 12 meeting with President Joe Biden, López Obrador said gas and fertilizer plants will be established with U.S. investors, though he provided no details.
López Obrador also said on July 15 that a planned rehabilitation and modernization of fertilizer plants owned by Petroleos Mexicanos (Pemex) will increase fertilizer production by 50%. Mexico plans to spend $530 million to increase production. Soon after leaving Washington, he toured fertilizer plants in Baja California Sur, Michoacan, and Veracruz. He also announced plans that the government would give free fertilizer to some 2 million small farmers in nine states.
As reported last week, López Obrador and Biden announced that the U.S. will supply Mexico with up to 1 million tons of ammonium sulfate (GM July 15, p. 6). Mexico removed several import duties in May, including those on ammonium sulfate. In mid-June, the first vessel of duty-free U.S. ammonium sulfate docked in Mexico.