Fertilizer International 507 Mar-Apr 2022
31 March 2022
Fertilizer Industry News
Fertilizer Industry News
EUROPE
EuroChem makes offer for Borealis’ nitrogen business
EuroChem has made a binding offer for Borealis Group’s fertilizer, melamine and technical nitrogen business.
The sale to EuroChem includes production sites across Europe and an accompanying sales and distribution network. These are valued at e455 million.
Austrian-headquartered Borealis is a key European producer and supplier of straight nitrogen and complex NPK fertilizers. The company manufactures ammonium nitrate (AN) in France and calcium ammonium nitrate (CAN) in Germany. It also operates around 60 warehouses across the continent with a holding capacity of 70,000 tonnes.
Borealis is jointly owned by Austrian petrochemicals company OMV (75%) and Abu-Dhabi based Mubadala (25%). It has been seeking a buyer for its European nitrogen business since February 2021.
The company owns and operates five European fertilizer production plants. Three of these plants are located in France, one in Germany and another in Austria. Sales volumes from these sites totalled 3.9 million tonnes in 2020, generating revenues of e908 million. This sales volume includes approximately 0.8 million tonnes of technical nitrogen solutions and around 150,000 tonnes of melamine. The five nitrogen production sites supply the market through an established distribution network in France and Central and Eastern Europe, partly located along the Danube River.
Borealis’ largest fertilizer production site is in Linz, Austria.
This produces ammonia, nitric acid, urea, NPKs and CAN.
Despite the planned divestment, Borealis is retaining its large ownership stake (77.4%) in Rosier and its two production sites in Moustier, Belgium, and Sas van Gent, the Netherlands. Rosier is a major manufacturer of speciality NPKs and liquid and water-soluble fertilizers.
“The addition of the Borealis nitrogen business to our portfolio, once approved, will strengthen our foothold considerably in such a key market as Europe,” said Vladimir Rashevskiy. EuroChem Group’s CEO. “We are delighted with the results of our negotiations, and look forward to creating opportunities for further growth in the European market together with Borealis’ impressive management team.”
If approved, the acquisition will significantly expand Euro-Chem’s European production assets. These include the Lifosa DAP/NPS plant in Lithuania, plus NPK and nitrates units in Antwerp, Belgium. The company also owns and operates its Russian fertilizer production assets at Belorechensk, Kingisepp, Novomoskovsky and Nevinnomysskiy. EuroChem is also a relatively recent new potash market entrant, having developed the large-scale Usolskiy and VolgaKaliy mines in Russia and brought these into production in recent years.
As Fertilizer International was going to press, however, news emerged that Borealis was likely to reject EuroChem’s bid, as a consequence of the war in the Ukraine and tightening western sanctions.
Yara halts ammonia production in France and Italy
Yara has stopped production at its Ferrara (Italy) and Le Havre (France) ammonia plants.
The two plants have a combined annual capacity of one million tonnes for ammonia and 0.9 million tonnes for urea.
The decision to temporarily cease production was made on 9th March in response to record European natural gas prices. These have skyrocketed following Russia’s invasion of Ukraine on 24th February.
Yara said its European ammonia and urea production assets were likely to be operating at approximately 45 percent of capacity, taking into account optimisation and maintenance work at other sites.
“Yara will continue to monitor the situation and to the extent possible use its global production system to keep supplying customers and secure continuity in food supply chains, but curtailing production where necessary due to challenging market conditions,” the company said in a statement.
Yara, like many European producers, was forced to cut ammonia production in response to record high natural gas prices in early October last year. Ammonia production costs became unsustainable for most market players and, consequently, units across the region ceased production and were idled indefinitely (Fertilizer International 505, p8).
As a consequence, the company’s European ammonia production had been operating at approximately 30 percent (circa 370,000 tonnes) below capacity from September to November 2021. Most of this production did, however, eventually come back on stream by mid-December as gas prices eased (Fertilizer International 506, p9).
RUSSIA
TOAZ shutters four ammonia plants
Russia’s Togliattiazot (TOAZ), the world’s largest ammonia exporter, has shut down four ammonia units and reduced operating capacity at a further three units.
The company announced the major production curtailment on 25th February. Simultaneously, it also suspended pipeline movements of ammonia to the Black Sea because of the “safety of people living in the area of the ammonia pipeline”.
TOAZ usually produces three million tonnes of ammonia and nearly one million tonnes of urea annually. Limited ammonia production would continue to maintain urea production and fulfil contracted tonnages that are moved by rail, the company said.
TOAZ exports ammonia to Morocco and Turkey via pipeline through the Black Sea port of Yuzhny. However, both the port and its pipeline closed on 24th February following Russia’s invasion of Ukraine.
Russia exported $2.14 billion in ammonia and fertilizers to Europe in 2020, according to UN Comtrade data. This total includes $250 million in trade to Turkey and $240 million in trade to Morocco.
Yuzhny itself is responsible for distributing around one-fifth of seaborne ammonia west of the Suez Canal.
Sources told S&P Global Platts that Moroccan phosphates producer OCP could lose access to 40 percent of its ammonia sourcing due to the ammonia shutdown.
In the immediate aftermath of the TOAZ plant and pipeline closures, the cfr Northwest Europe price for ammonia reached $1,150/t and the Black Sea f.o.b. price reached $1,125/t, S&P Global Platts said.
NORWAY
Linde wins electrolyser contract for Porsgrunn plant
Linde Engineering has secured a contract from Yara International to build a 24-MW electrolyser as part of a green ammonia demonstration project at the company’s Porsgrunn production complex in Norway.
This large-scale electrolyser will produce around 10 t/d of green hydrogen. This in turn will be used to generate around 20,500 tonnes of green ammonia annually. Green ammonia production at this scale will cut Porsgrunn’s CO2 emissions by around 41,000 t/a by avoiding hydrocarbon-based production at the site. Norwegian government investment agency Enova has awarded Yara NOK 283 million to help bankroll the project (Fertilizer International 506, p8)
“The project aims to supply the first green ammonia products to the market as early as mid-2023, both as fossil-free fertilisers, as well as emissions-free shipping fuel,” said Magnus Ankarstrand, president Yara Clean Ammonia.
The green hydrogen system will use proton exchange membrane (PEM) technology from UK company ITM Power. Casale is designing the accompanying ammonia converter for Yara.
CANADA
Nutrien signals potash production boost
Nutrien, the world’s biggest potash miner, could boost production by up to 29 percent in future, its CEO has told Reuters.
The potential move would depend on the extent and longevity of any sanctions placed on rival Belarusian and Russian potash producers.
Interim chief executive Ken Seitz, in his first interview since his appointment in January, said Saskatchewan-based Nutrien could restart up to four million tonnes of idled annual potash capacity, depending on whether economic sanctions were likely to be lengthy or not.
“If these are short-lived events, we don’t want to spend all kinds of money staffing and opening up ground,” Seitz told Reuters. “If this is going to be a longer-term problem for the market, we will absolutely do that, we will absolutely step into that void.”
As a first step, Nutrien could raise output by between 700,000 tonnes and one million tonnes in the second half of 2022, Seitz confirmed, as this output increase would not incur any major expense. However, he did not confirm how soon the company might restart its other idled capacity.
Seiz’s comments were made on 1st February, several weeks before Russian troops crossed the border into Ukraine on 24th February. Since then, Russia’s invasion of its European neighbour has deepened global potash availability concerns.
Currently, Nutrien produces almost 14 million tonnes of potash annually, equivalent to around 19 percent of global sales. Demand for Canadian potash is strong at present. Canpotex, the Canadian export consortium jointly owned by Nutrien and Mosaic, is fully committed on sales until the end of March.
Despite strong market demand, global operational capacity still exceeds this by more than 10 million tonnes, according to BMO Capital Markets.
“In a normal situation, the potash market is oversupplied,” BMO analyst Joel Jackson told Reuters. “If I was Nutrien, I would probably hold back on my decision to expand too much too fast.”
Potash prices moved upwards in early March edging closer to their previous 2008 peak value – driven higher by commodity market fears over the impact of Russia’s invasion of Ukraine. Prices had already climbed fast this year following the imposition of Western sanctions against Belarus.
Russia’s Uralkali and the Belarus Potash Company (BPC) together account for more than one-third of global potash sales. Additional Canadian production would therefore only replace a fraction BPC’s output, which is typically around 12.5 million annually.
UNITED KINGDOM
Anglo set to invest £440m in Woodsmith project in 2022
Anglo American expects to invest £440 million in its UK Woodsmith mine project this year.
The under-construction polyhalite mine is located in North Yorkshire near England’s North Sea coast.
The investment was announced by chief executive Mark Cutifani during the company’s annual results at the end of February. He also provided investors with an update on the project’s progress.
Cutifani said that Anglo had invested nearly £390 million in the polyhalite mine project in 2021. Excavation of the mineral transport tunnel from Teesside had exceeded 18 kilometres by the end of the year, beyond the intermediate access shaft site at Lockwood Beck.
The Lockwood Beck shaft is also complete, having reached its target depth of 383 metres, and shaft lining is currently under way. At the mine head itself, shaft boring has started in the services shaft, while progress is also being made on the production shaft infrastructure.
The company is currently working on a number of improvements to the project’s design. These will ensure the project meets Anglo American’s safety and operating standards, as well as its commercial objectives, given the very long life of the mine.
“This is a world class fertiliser project and a business segment that we are even more positive about than when we acquired the project,” Cutifani said. “This is a very long-life asset and a product for which we see increasing market interest as the commercial trials demonstrate its crop yield and numerous environmental qualities, so we are going to take the necessary time to get every aspect of the design right to match our long-term vision and value aspirations.”
The latest tranche of investment coincides with the appointment in January of Tom McCulley as the new CEO of Anglo American’s Crop Nutrients business. Under his leadership, the company will continue to develop the project’s detailed design engineering this year, with expected changes to the phasing of work, particularly at the Woodsmith mine site.
INDIA
Nuberg secures NPK expansion project from FACT
Nuberg has won an engineering, construction and procurement (EPC) contract from Fertilisers and Chemicals Travancore Limited (FACT) for a 1,650 t/d NPK fertilizer project in India.
The brownfield expansion will be delivered for the company’s FACT-Cochin division and built at the Ambalam Edu production site in the Ernakulam district of Kerala state. This will increase the site’s total NPK fertilizer production capacity to 3,650 t/d
Indian-based Nuberg is a leading global EPC and turnkey project management company.
The expansion will incorporate pre-neutralizer with pipe reactor (PN+PR) technology licensed from INCRO. It is scheduled to be completed by mid-2023.
The extra capacity will be mainly dedicated to two products: NPK 20:20:0:13 production at a rated capacity of 75 t/h using pre-neutralizer (PN) technology and DAP 18:46:0 using the PN+PR technology. The process will consume ammonia, phosphoric acid, sulphuric acid and urea as feedstocks.
Nuberg has also been contracted to carry out the design and detailed engineering work to enable the owner to manufacture different NPK grades in future (e.g., 10:26:26, 16:20:0, 28:28:0, 12:32:16 and 14:35:14).
“We are thankful to the Government of India and FACT for entrusting another turnkey project to our engineering capabilities and EPC services and solutions,” said A K Tyagi, CMD, Nuberg Engineering Ltd. “This project serves as a prime example of the successful combination of Nuberg EPC’s global expertise and local knowledge to offer a complete turnkey solution.”
FRANCE
Tessenderlo plans new organic fertilizer plant
Tessenderlo Group is planning to construct a new production line for organic fertilizers at its Akiolis manufacturing plant in Vénérolles, Aisne, France.
The new line will produce organic pellets for Tessenderlo’s Violleau business unit. It is being built in response to rising demand for organic fertilizers. The new plant should become operational in the first-quarter of next year.
By incorporating valorised meat and bone meal and animal proteins, the organic fertilizers from the new manufacturing line will offer nutrients (nitrogen and phosphorus) at high concentrations, a characteristic that is particularly valued by the organic farming sector.
Tessenderlo Group created Violleau in 2021 as a new high-growth business unit to support its expansion into organic agriculture in Europe. Violleau specialises in the production of organic products from animal and vegetable matter, and the commercialisation of biocontrol products.
Violleau’s French-manufactured organic and organo-mineral formulations, offered as compost or pellets, can be used in both organic and conventional agriculture. Applications include field crops, vineyards, arboriculture and market gardening.
“With the new production line in Vénérolles, we are further expanding our local presence in the organic fertilizer market. Our new production line responds to the growing demand for organic fertilizers from the European market, which is in line with the European Union’s Farm to Fork Strategy,” said Didier Coppieters, GU Director of Violleau.
“At the same time, we will also ensure a better service to the agricultural market in Northern France and Belgium thanks to the strategic location in Vénérolles,” added Dominique Billard, general manager, Violleau France.
Violleau already operates a production plant at La Ronde en Deux-Sèvres inn France.
MOROCCO
Koch to acquire half share in JFC III
Koch Ag & Energy Solutions (Koch) has signed an agreement with OCP to acquire a 50 percent share in the Jorf Fertilizers Company III (JFC III) production unit.
JFC III owns and operates a 1.1 million t/a capacity integrated phosphate fertilizer production unit at the Jorf Lasfar fertilizer production complex, Morocco. JFC III will operate as a OCP/Koch joint venture on closure of the deal.
The massive Jorf Lasfar fertilizer complex is the world largest phosphate fertilizer production site.
Products manufactured at JFC III will be jointly marketed by OCP and Koch Fertilizer, LLC. Both companies will also collaborate on OCP’s ammonia and sulphur supply and take advantage of their combined logistical capabilities to ship fertilizers from Morocco.
“The venture builds on Koch’s longstanding relationship with OCP and a shared vision to expand phosphate offerings globally,” said Scott McGinn, Koch Fertilizer executive vice president. “We are excited to grow Koch Fertilizer from a predominately nitrogen producer and distributor by offering a larger suite of phosphate products to our customers. We look forward to collaborating with OCP and leveraging the unique capabilities of both companies.”
“Our collaboration with Koch is now entering a new phase after more than a decade of commercial relationship,” said Soufiyane El Kassi, OCP’s chief growth officer. “Koch is a key strategic partner with a shared vision on how to best serve farmers and agriculture. Through this transaction, we are happy to welcome another leading industrial player such as Koch to Morocco.”
Go-ahead for the new Koch/OCP venture will require the clearance of customary closing conditions.
