Brazil and Bolivia have signed a Memorandum of Understanding (MOU) to undertake studies on potentially building new fertilizer plants in both countries, according to an Agência Brasil report on Jan. 30, citing Brazil’s Agriculture Ministry.
The two countries inked agreements to study new plants to produce nitrogen, phosphate, and potash fertilizers, the Brazilian ministry said in a statement. The deal should help reduce Brazil’s dependence on imported fertilizers, said Minister of Agriculture, Livestock and Food Supply Carlos Fávaro.
Alternatives need to be created, one of which is the supply of natural gas at more competitive prices, the report also cited the minister as stating. Bolivia is one of Brazil’s key suppliers of natural gas.
The MOU follows reports from last autumn citing Bolivia’s Hydrocarbons and Energy Minister Franklin Molina that Brazil’s government was seeking to invest in new fertilizer projects in Bolivia that would produce nitrogen fertilizers, including urea, as well as potash and phosphates (GM Sept. 8, 2023).
Brazil’s state-owned oil and gas group Petróleo Brasileiro’s SA (Petrobras) and Bolivia’s Yacimientos Petroliferos Fiscales Bolivianos (YPFB) in October were also reported to be in talks about a possible joint investment to build an ammonia and urea plant in Puerto Quijarro, on the Brazil-Bolivia border (GM Oct. 27, 2023). Petrobras cautioned at the time that no final investment decision had been made.
Brazil is already the main customer of Bolivia’s only urea plant, Marcelo Quiroga Santa Cruz (formerly known as Bulo Bulo), which has a nameplate capacity for 2,100 mt/d of granular urea.
According to the statement, Fávaro said Brazil also intends to compete its current fertilizer projects, including Petrobras’ nitrogen fertilizer Unit-III (UFN-III) project in Três Lagoas, in the state of Mato Grosso do Sul. The plant has a projected urea and ammonia production capacity of 3,600 m/d and 2,200 m/d, respectively.
Construction of the project was halted in December 2014 when work was about 81% complete. Petrobras then tried to sell the project, including two failed deals with Russia’s Acron Group (GM April 29, 2022).
Early last year, however, Fávaro indicated that Petrobras would resume construction of UFN-III as part of new President Luiz Inácio Lula da Silva’s push for Petrobras to play a broader role in the development of various public policies in Brazil, including fertilizer investments (GM Jan. 20, 2023).
The new agreements signed by Brazil and Bolivia will expire in five years but can be renewed, according to the statement, and are part of a proposed expansion of cooperation between the two countries. Ministers from the two governments on Jan. 30 also signed an MOU aimed at expanding cooperation in biofuels, biotechnology, and fertilizer trade.
The MOU is aimed at developing policies to determine prices for the fertilizer and biofuels industry in the two countries, according to a bnamericas report, citing a press release by Bolivia’s Ministry of Hydrocarbons and Energy. Technical visits, internships, training, symposiums, seminars, and other activities will also be undertaken related to fertilizers and biofuels.