All posts by mickeybarb@charter.net

Petrobras to Resume Construction of Three Fertilizer Plants, Says Agriculture Minister

Brazil, News, News Briefs, Nitrogen

Brazil’s Agriculture Minister Carlos Fávaro is understood this week to have said state-owned oil and gas major Petróleo Brasileiro SA (Petrobras) will “resume construction” of three fertilizer plants, Brazil’s O Globo newspaper reported. However, it is not clear which of Petrobras’ four fertilizer plants, including the still-to-be completed Nitrogen Fertilizer Unit-III (UFN-III) project, in Três Lagoas, in the state of Mato Grosso do Sul, the minister was referring to.

The minister’s comments come amid the country’s newly inaugurated government under President Luiz Inácio Lula da Silva signalling its desire for Petrobras to play a broader role in the development of various public policies in Brazil, including fertilizer investments (GM Jan. 13, p. 31).

Petrobras in December halted the competitive procedure for the sale of its wholly-owned nitrogen fertilizer plant, Araucãria Nitrogenados, known as ANSA, in the southern Brazilian state of Paraná (GM Dec. 23, 2022).

A banamericas report at the time, citing a researcher at Brazilian petroleum research institute Ineep, Henrique Jäger, reported Petrobras’ decision to halt the ANSA sale, as well as of certain other key downstream assets, was due to the new president-to-be’s belief in the strategic importance for the country’s energy sector that Petrobras remain an integrated upstream-and-downstream company with a major presence in the refining, natural gas, and petrochemical sectors, while also investing in alternative energy sources (GM Dec. 23, 2022).

Grupa Azoty Subsidiary Becomes Exclusive Distributor of Compo Products in Poland

News, News Briefs, Poland, Specialty

Polish fertilizer and chemicals group Grupa Azoty SA subsidiary Agrochem Puławy and Compo Expert, an international manufacturer of foliar and specialty fertilizers, are joining forces to supply customers with a complete range of fertilizer products, Azoty said on Jan. 13.

Agrochem Puławy became the exclusive distributor of Compo Expert products in Poland starting from January 2023. Münster, Germany-based Compo Expert has been owned by Grupa Azoty since November 2018 (GM Nov. 30, 2018).

PhosAgro Petitions Russian Government to Adjust Fertilizer Export Duty Parameters

News, News Briefs, Russia

PJSC PhosAgro, Moscow, has asked the Russian authorities to adjust the parameters of the export duties implemented on fertilizers from Jan. 1, 2023, by reducing the price cut-off level, according to a Jan. 19 Interfax report. The report cited an unnamed source familiar with the content of a letter sent by PhosAgro CEO Mikhail Rybnikov to Russian President Vladimir Putin at the end of December.

Russia introduced export duties on all types of mineral fertilizers from Jan. 1 this year, at a rate of 23.5% on products priced over $450/mt (GM Dec. 9, 2022). For fertilizers priced up to a maximum of $450/mt, the rate of duty is zero. The duties will remain in place through Dec. 31, 2023.

According to the report, citing the PhosAgro CEO, the current approach discriminates against “more technologically advanced, though less marginal” producers of phosphates and complex fertilizers.

According to the CEO, under the existing parameters, nitrogen and potash fertilizers are not subject to the export duties, as their prices at the beginning of 2023 had fallen below the cut-off price of $450/mt.

Rybnikov believes – according to the report – that the duty parameters were approved without accounting for aspects such as the processing yield and the production profitability of various types of fertilizers.

Furthermore, he believes the duty levy will have “a minimal impact on the profitability of potash and nitrogen fertilizer production, which is 40%-60%, while the production profitability of phosphates and complex fertilizers will decrease to around 10%, which would lead to lower investment going forward,” according to the PhosAgro appeal, as cited by the report.

The Russian fertilizer group consequently has asked for the use of “the most transparent processes in order to determine the acceptable level of profitability in excess of operating costs as the baseline parameter for the withdrawal of excess profits.”

Putin has instructed the Russian government to consider PhosAgro’s appeal, according to the report, citing the source. PhosAgro declined to comment.

Acron Group Posts 3% Fertilizer Output Boost in 2022

Ammonia, Ammonium Nitrate, News, News Briefs, NPK, Russia, UAN, Urea

Acron Group, Moscow, reported a 3% increase in its commercial output of mineral fertilizer to 6.99 million mt in 2022, up from 6.77 million mt the previous year.

Nitrogen fertilizer production was up 9% to 5.51 million mt compared with the previous year. Of that total, output of urea for agricultural use grew 25% to 1.82 million mt, and AN production increased 8% to 2.41 million mt. But UAN output was down by 7% to 1.26 million mt.

Acron saw its first production of calcium nitrate last year, following the start of a 100,000 mt/y unit to produce granulated calcium nitrate at its facility in Veliky Novgorod in northwest Russia in August (GM Aug. 12, 2022). It had produced 9,000 mt by the end of last year.

Ammonia output fell by 3% to 2.82 million mt.

Production of complex fertilizers also fell, by 10% compared with 2021, to 2.36 million mt. Of this total, NPK output declined to 2.23 million mt, an 8% fall.

Acron Group’s overall commercial output was 2% off last year, declining to 8.35 million from 8.49 million in 2021.

Acron Group mineral fertilizer production (‘000 mt)

Product FY2022 FY2021  % change
Ammonia 2,816 2,909 (3)
Nitrogen fertilizers 5,505 5,058 +9
AN 2,410 2,241 +8
Urea 1,822 1,463 +25
UAN 1,264 1,354 (7)
Calcium nitrate 9 0  
Complex fertilizers 2,362 2,625 (10)
NPK 2,226 2,406 (8)
Bulk blends 136 219 (38)
Total commercial output 6,991 6,765 +3

Russian 2022 Fertilizer Revenues Soar, Report Says

News, News Briefs, Russia

Russia’s revenue from fertilizer exports surged in 2022 despite a decline in sales volumes, as fertilizer prices soared after the country’s invasion of Ukraine.

In the first 10 months of the year, the value of Russian fertilizer exports jumped by 70% to $16.7 billion compared with the same period in 2021, the UK’s Financial Times reported, citing UN data.

Based on import statistics from the country’s trade partners, in volume terms, Russia’s overseas sales of fertilizers fell only 10% versus the same period in 2021, according to the report, citing analysis by the UN Food and Agriculture Organization (FAO).

The Russian Fertilizers Producers Association (RFPA) reporting in late December, however, estimated that the country’s exports of mineral fertilizers were likely to have fallen by 15% in full year 2022, to 31.6 million mt. compared with 2021 (GM Dec. 6, p. 28).

Oman’s OQ Inaugurates $463 M Ammonia Plant; First Tons Exported

Ammonia, Asia, News, News Briefs

Oman’s global integrated energy group OQ (formerly known as Oman Oil Co.) on Jan. 15 officially inaugurated its new ammonia plant at Salalah in the country’s Dhofar governorate, Muscat Daily has reported.

Built at a cost of some $463 million, the plant has a production capacity of 1,000 mt/d of liquid ammonia and represents one of OQ’s main growth projects, according to the group.

The ammonia plant started production in late August/early September, according to a Sept. 4 media statement by OQ, and made its first shipment of liquid ammonia through Salalah port, according to an announcement at the time by OQ Trading Ltd., OQ Group’s trading arm.

The new production facility is fully integrated with an existing 1 million mt/y capacity methanol plant, enabling cost rationalizations and performance and production efficiency optimization, OQ said. The ammonia plant was designed to retain the hydrogen-rich purge gas generated by the methanol plant as feedstock for ammonia production, the company added.

OQ, which is a subsidiary of the Oman Investment Authority, said the economic significance of the ammonia plant is “paramount” in light of its integration with other of the group’s projects.

“The ammonia is used in the production of green hydrogen, which is a key component of the OQ Energy Transition Agenda, the Muscat Daily report quoted OQ Group CEO Talal Al Awfi as saying.

A green ammonia production project already is under development in Oman’s Duqm Special Economic Zone, which once fully developed, is targeted to produce up to 1.2 million mt/y of green ammonia.

The Green Hydrogen and Chemicals Co. (GHC), a joint venture between the UK unit of India’s ACME Group, and Norway-based Scatec ASA, started basic construction of the plant in December, according to a report in the Oman Observer (GM Dec. 16, 2022).

The initial phase of the development is expected to produce 100,000 mt/y (GM March 11, 2022) and Yara International ASA already has signed on for the offtake of the phase one output (GM July 15, 2022).

BHP Reports Jansen Stage 1 is 16% Complete

Australia, News, News Briefs, Potash, Saskatchewan

BHP Group Ltd.’s, Melbourne, Jansen “Stage 1” potash project in Saskatchewan, Canada, 140 kilometers east of Saskatoon, is now 16% complete and is continuing to track to plan, the mining group reported in its Operational Review for the half-year ended Dec. 31, 2022, released on Jan. 18.

This is up from 11% complete as of the end of September (GM Oct. 21, 2022). First production continues to be targeted for the end of calendar year 2026. In its initial stage, when fully ramped-up, Jansen “Stage 1” is expected to produce 4.35 million mt/y of potassium chloride.

Jansen has the potential for the addition of three subsequent expansion phases to take the mine to an envisioned eventual production capacity of 16-17 million mt of potash a year. BHP already has accelerated the Jansen “Stage 2” study, which could add another 4 million mt/y.

Orica, Saudi Chemical Ink MOU for Tech Cooperation on AN, Nitric Acid Production

Ammonium Nitrate, Australia, News, News Briefs, Saudi Arabia

Orica Mining Services Portugal, part of Australian explosives manufacturing group Orica Ltd., and Saudi Chemical Holding Co. have signed a nonbinding Memorandum of Understanding (MOU) for technical cooperation to localize the production of ammonium nitrate (AN) and nitric acid, the Saudi financial news portal Argaam reported on Jan. 15.

Under the MOU, a project to localize the AN and nitric acid industry will be set up.

The partnership also includes the introduction of technologies in the mining industry that will improve safety, productivity, and ESG standards, and is aimed at supporting industries related to mining and exploration, construction and infrastructure, as well as the cement industry, in line with the objectives of Saudi Arabia’s “Vision 2030.”

The MOU was signed by Saudi Chemical Holding Co. subsidiary Saudi Chemical Co., and is valid for six months.

Last November, rival Australian explosives and fertilizer manufacturer, Incitec Pivot Ltd. (IPL), signed a joint venture agreement with Saudi firm Modern Chemicals Co. (MCC) to develop a Technical Ammonium Nitrate (TAN) Plant in Ras Al Khair Industrial City, in Saudi Arabia’s Eastern Province (GM Nov. 18, 2022; Nov. 4, 2022).

Riyadh-based MCC is developing a 300,000 mt/y TAN production plant in Ras Al Khair Industrial City. It will be the first TAN plant in the Kingdom, and output will be targeted to the Saudi Arabian and regional mining sectors.

Acron’s Dorogobuzh Launches Fourth Nitric Acid Unit

News, News Briefs, Russia

Acron Group subsidiary Dorogobuzh has launched a new 135,000 mt/y UKL-7M nitric acid unit at its Smolensk production site in western Russia. Once operational, Dorogobuzh’s total nitric acid production capacity will reach 1.5 million mt/y across four units, Acron said Jan. 17.

The additional nitric acid output will help increase the production of key products, namely ammonium nitrate and NPK fertilizers, said Acron Chairman Alexander Popov.

Indonesia’s Pupuk Kaltim to Use IPO Proceeds to Finance Fertilizer Expansion

Indonesia, News, News Briefs

Indonesian state-owned fertilizer company PT Pupuk Kalimantan Timur (Pupuk Kaltim) is reported to be planning to use the proceeds of a planned initial public offering (IPO) to help finance a $2 billion fertilizer plant, according to a Jan. 17 report by Indonesia’s oil, mining, and energy news portal petromindo.com.

According to a post by indonesia.postsen.com, Pupuk Kaltim this week officially started the establishment of a fertilizer industrial area in Fakfak Regency, West Papua. According to a Bloomberg report, citing a Jan. 16 company emailed statement, it aims to finish building in the next five years.

Reports emerged early this month that parent company PT Pupuk Indonesia was considering selling primary shares representing a 10%-20% stake in Pupuk Kaltim, and that the proceeds of the IPO, if it went ahead, would be used for capacity expansion, according to Reuters, citing two unnamed sources with direct knowledge of the matter (GM Jan. 6, p. 29).

The companies are eyeing the offering to take place in Jakarta this year, according to the report.

No further details are readily available about the capacities planned at the new fertilizer industrial area. Pupuk Kaltim already is Indonesia’s biggest ammonia and urea producer, with four ammonia plants with total production capacity of 2.18 million mt/y and five urea plants producing 3.77 million mt/y, according to Green Markets database.