All posts by mickeybarb@charter.net

EuroChem Targets Full Capacity at VolgaKaliy by 2025

News, News Briefs, Potash, Russia

EuroChem Group AG expects to reach full capacity production of 2.3 million mt/y of potassium chloride at its VolgaKaliy operation in Russia’s southern Volgograd region by 2025, with the possibility of subsequently expanding to up to 4.3 million mt/y, according to a Fertilizer Daily report, citing a company press release.

VolgaKaliy has been dogged by geological issues that have impacted and delayed the project’s development. The operation produced 228,000 mt of potassium chloride in 2021 and also made its first commercial sales that year, according to EuroChem commenting in February last year (GM Feb. 25, 2022). The company did not publish any operational results for 2022.

In the recent press statement, according to the report, EuroChem-VolgaKaliy Executive Director Yevgeny Sakharov said some 3 million mt of potassium salts have been mined since the project started.

However, some analysts and market watchers are sceptical that VolgaKaliy can achieve its planned output target by 2025.

“We view this announcement with caution,” said Green Markets Research Director Alexis Maxwell. “This site has had persistent geological issues, while sanctions have restricted Russian producers’ parts procurement activities.”

EuroChem produced 2.39 million mt of potash in 2021 at its other potash production site, Usolskiy, south of Berezniki, and last February said the operation was on track to reach 2.7 million mt/y capacity “soon” (GM Feb 25, 2022).

The company last September announced it also had secured approval from the state expert review office, Glavgosexpertiza, for its proposed project for a second expansion phase at Usolskiy (GM Sept. 9, 2022).

The project involves the construction of a new underground mine with capacity to mine 12.6 million mt/y of sylvinite ore and a processing plant, together with additional transport and utilities infrastructure.

EuroChem has still to take a final investment decision on the development, but at the time of the announcement planned to make the decision by the end of 2022.

Uralchem/Uralkali Could See FY2022 EBITDA of $3.8 B, Says Owner

News, News Briefs, Russia

Russian fertilizer group Uralchem JSC and potash producer Uralkali PJSC could report a combined consolidated EBITDA of $3.8 billion in fiscal year 2022, Interfax has reported, citing co-owner Dmitry Mazepin speaking to Russia’s Rossiya 24 television channel.

The group did not disclose consolidated results for 2021.

According to the report, citing Mazepin, about 25-27% of Uralchem/Uralkali’s revenues now come from settlements in Chinese yuan. The group is trying to increase the amount of settlements it receives in rubles, Mazepin said.

SABIC Agri-Nutrients Sees Deal for 49% Stake in ETG Inputs Closing in 1H-2023

News, News Briefs, Saudi Arabia

SABIC Agri-Nutrients Co. Ltd., Riyadh, now expects the completion of its transaction to acquire 49% of the share capital of Dubai-based agri-nutrient blender and distributor ETG Inputs Holdco Ltd. in the first half of FY2023, and the financial impact of the transaction to occur during the first fiscal half, the company said in a filing to the Saudi’s Tadawul.

SABIC Agri-Nutrients and ETG Inputs Holdco’s parent company, ETC Group, also based in Dubai, signed a binding transaction for the stake acquisition in January 2022 (GM Jan. 28, 2022).

The Saudi company originally had expected the deal and the financial impact of the transaction to occur during the second-half of its fiscal year ended Dec. 31, 2022. It agreed to pay an enterprise value of $320 million, based on cash free, debt free, and changes in the working capital adjustment that will determined at transaction completion.

ETG owns more than 350 distribution centers across sub-Saharan Africa, and blends and distributes specialized fertilizers and agro chemicals.

SABIC Agri-Nutrients said the stake acquisition is part of its strategy direction to integrate the value chain to include blending and distribution of agri-nutrients in global markets and move closer to farmers and end-customers.

Brazil’s Lula Government Wants to Expand Petrobras’ Role, Including Fertilizer Investments, Says Report

Brazil, News, News Briefs, Nitrogen

Brazil’s newly inaugurated government under President Luiz Inácio Lula da Silva has signalled its desire for the state-owned oil and gas major Petróleo Brasileiro SA (Petrobras) to play a broader role in the development of various public policies in the country, Brazil’s O Globo newspaper reported this past weekend.

The government sees the expansion of Petrobras’ role to include the resumption of fertilizer production and the expansion of refining supply in Brazil. However, the report pointed out these aspirations collide with a company that has reduced its range of activities as a result of a change in strategy in recent years marked by the sell-off of assets.

Last month, Petrobras 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).

The sale was in the binding phase, but the company provided no public comment for its decision. In its Dec.19 statement, Petrobras said it would now evaluate its next steps related to the divestment of ANSA.

But, according to a bnamericas report in the same week, citing a researcher at Brazilian petroleum research institute Ineep, Henrique Jäger, Petrobras’ decision to halt sales of key downstream assets – while moving forward with its upstream divestments – followed the election victory of Lula.

According to Jäger, the new president’s transition team for the energy sector considers it of strategic importance that the state-owned Petrobras remains an integrated upstream-and-downstream company with a major presence in the refining, natural gas, and petrochemical sectors, including fertilizers, while also investing in alternative energy sources.

As previously reported Jäger believes Petrobras will resume investments in the fertilizer sector, likely putting ANSA back into operation with the reconversion to natural gas. Previously, the plant has been operated from asphaltic rock, whose market value has appreciated, making the operation expensive, which led to the plant’s mothballing, he said.

Jäger also thinks Petrobras will probably finish the construction of its other nitrogen fertilizer unit, “Nitrogen Fertilizer Unit-III” (UFN-III), in Três Lagoas, in the state of Mato Grosso do Sul, “if only to recover the investments already made and sell it later,” according to the report.

Belarus’ Gomel Chemical Plant Touts Export Refocus to Russia, China, & Libya

Belarus, DAP/MAP, News, News Briefs, NPK

Belarus’ OJSC Gomel Chemical Plant since the imposition of Western sanctions has been refocusing its exports to Russia, China, and Libya, according to an Interfax report, citing the Gomel Chemical Plant Director Dmitry Chernyakov in an interview with the corporate newspaper of the holding company, Belneftekhim Holding.

Belarus’ Deputy Prime Minister Piotr Parkhomchik last month touted the company’s success in “re-orienting” its exports of “complex fertilizers” to Russia, and having taken measures to produce new brands that are not subject to Western sanctions, as well as Gomel starting deliveries for the first time of phosphate fertilizers to Russia (GM Dec. 9, 2022).

According to the Chernyakov, the company is currently exporting approximately 360,000 mt to 430,000 mt of product annually, adding that exports to Russia are in cooperation with Russia’s largest distributor of mineral fertilizers. He did not name the distributor, but said Gomel Chemical Plant’s products complement the product mix of the Russian partner.

As cited by the report, the Gomel Chemical Plant sold more than 200,000 mt of NPK fertilizers over six months. Chernyakov highlighted the plant had kept its presence in the European NPK fertilizer market, “despite difficulties with payments.” He said the company had had to make a change to its NPK fertilizer production line to remove the potash content covered by sanctions for product sold on European Union markets.

He also highlighted the plant’s success in opening a new market for its products – Libya. At the same time, he noted deliveries of its mineral fertilizer products to Asia and South America make losses for the company due to “significant” delivery costs.

The Gomel Chemical Plant is Belarus’ largest producer of phosphate fertilizers, as well as having the capacity to produce complex fertilizers, ammophos, superphosphate, and NPK fertilizers of various grades, according to its website. The company’s nameplate production capacity included 1.1 million mt/y of DAP/MAP, according to Green Markets database.

Ukraine Fertilizer Production Fell 70% in 2022; Fertilizer Demand down 40%, Report Says

News, News Briefs, Ukraine

Ukraine saw a fall in fertilizer production of nearly 70% in 2022, according to a Ukraine Business News report.

The country’s production of fertilizer decreased from 5.4 million mt in 2021 to 1.75 million mt last year. The report cited the impact of Russia’s full-scale invasion of the country, which saw Ukraine lose control of the Severodonetsk Azot plant, the country’s third-largest ammonia producer.

In addition, the fertilizer sector was hit by power shortages, high gas prices, and a reduction in export volumes.

According to the report, demand for fertilizers from Ukraine’s farmers also fell some 40% last year, amid loss of arable land due to destruction and occupation. Russian forces currently occupy over 20% of Ukraine’s arable land, while around 160,000 km2 has been mined, equating to roughly 26.5% of the country, according to the report, citing Ukraine government estimates

Of the chemical enterprises making up Ostchem, the Ukrainian holding company owned by Group DF, Cherkasy Azot produced 1.12 million mt last year, and Rivneazot produced 0.59 million mt, while Severodonetsk Azot only produced 0.05 million mt, according to the report.

However, Group DF sees market growth of some 15%-20% per year, as the demand for fertilizers in Ukraine began to increase in September-November as territories in the east and south were liberated from Russian control.

Bulgaria’s Neochim Halts NH3 Production Again

Ammonia, Ammonium Nitrate, Eastern Europe, News, News Briefs

Bulgarian fertilizer producer Neochim AD halted ammonia production again on Jan. 10 at Dimitrovgrad in southern Bulgaria due to a technical issue, Russia’s Tass news agency reported, citing a company bourse filing.

The production stoppage at the ammonia unit has also led to operations being halted at Neochim’s ammonium bicarbonate unit. The company said it was taking measures to establish the cause of the technical glitch and was working to resolve the issue.

Neochim has experienced a number of production disruptions to its ammonia and nitric acid units in the past several months. The most recent stoppage was at the ammonia unit in November, again reportedly due to a technical issue.

The producer had only just begun the process of resuming production in October after a shutdown in early August for planned annual maintenance, which was then extended due to high natural gas prices (GM Oct. 21, 2022).

Neochim has capacity to produce 0.45 million mt/y of ammonia and 0.63 million mt/y of ammonium nitrate at Dimitrovgrad.

Potash, Salt Developer Emmerson Updates on Khemisset Project

Isle of Man, Morocco, News, News Briefs, Potash

Isle of Man-based Emmerson Plc, developer of the potash and salt Khemisset Mine project in northern Morocco, has reported that the environmental permit for the project has advanced closer to approval by the relevant authorities, and a number of important issues that had held up progress have been resolved.

The discussions have now moved into the specifics of the Khemisset’s project’s water management, which is a key area of concern for Morocco following low rainfall in recent years, Emmerson said in a fourth-quarter update released on Jan. 9.

The company did not provide any indication when it might secure the environmental permit, saying while “cautiously optimistic” that the company’s proposals will be accepted, “the timing of the approvals is in the hands of the Moroccan authorities.”

Emmerson also reported basic engineering workstreams had “substantially” progressed during the fourth quarter, with design of the processing plant by US-based Barr Engineering now 90% complete, and infrastructure design by the Moroccan firm Reminex SA 80% completed.

It said both streams will be completed within the first quarter of 2023 “in readiness for financier due diligence and the transition to project execution.”

The company is also finalizing the first stage of securing the bank funding needed to bring Khemisset into construction. It has previously reported it has received “strong” expressions of interest from international and Moroccan lending banks, as well as development financial institutions and other financing counterparties, to underpin the construction financing package.

On Jan. 3, Emmerson announced the appointment of Liberum Capital as nominated advisor, following Liberum’s appointment as joint corporate broker to the company in February 2022.

Emmerson in November signed nonbinding offtake Memoranda of Understanding (MOU) with Switzerland-based companies Keytrade AG and Hexagon Group AG (GM Nov. 23, 2022)

The offtake deal with Keytrade is for the sale of a minimum of 245,000 mt/y of potash for a period of 10 years. With Hexagon, the offtake deal is also for a minimum of 245,000 mt/y of potash plus a minimum of 500,000 mt/y of salt product, both for a period of 10 years.

The MOUs account for some 65% of targeted annual potash production of 800,000 mt at Khemisset and 50% of the targeted 1 million mt/y of salt production. The operation is expected to have a 19-year mine life.

Petronas Chemicals to Divest 25% Equity Interest in Sabah Fertilizer Unit

Ammonia, Malaysia, News, News Briefs, Urea

Malaysia’s Petronas Chemicals Group Berhad (PCG) has entered into a Heads of Agreement (HOA) with the State Government of Sabah to divest 25% of its interest in Petronas Chemicals Fertiliser Sabah Sdn Bhd to Sabah state-owned oil and gas company SMJ Sdn Bhd, PCG announced in a Jan. 9 media statement.

SMJ is a wholly-owned subsidiary of Sabah State. PCG said the divestment is part of its strategic effort to position itself as a preferred partner in shaping and delivering the aspiration of PCG and SMJ to sustain and grow the petrochemicals business in Sabah.

Petronas Chemicals Fertiliser Sabah was established in 2011 to construct and operate an integrated ammonia and urea production complex in Sipitang Oil and Gas Industrial Park in the municipal district of Sipitang, approximately 145 kilometers southwest of Kota Kinabalu, the mercantile city in Sabah State on the Island of Borneo (GM Oct. 10, 2011).

According to PCG, the complex has capacity to produce 1.9 million mt/y of ammonia and urea and is the largest single train ammonia and urea plant in Southeast Asia and the third largest urea plant in Asia Pacific. The facility’s daily production capacity includes 2,100 mt for ammonia and 3,850 mt for urea, according to Green Markets’ data.

The urea is used both for agricultural applications as well as feedstock for resins and other chemicals.