12 minute read
Making A Mark In MENA
Gordon Cope, Contributing Editor, discusses the state of the fertilizer industry in various MENA countries, the challenges faced by the region and current efforts to tap into existing resources.
The Middle East and North Africa (MENA) region is home to hundreds of millions of people and a thriving agricultural sector. When it comes to domestic fertilizer production, however, it is underrepresented, despite possessing the natural resources to address this defi ciency. Fortunately, many countries in the region are moving to tackle the issue with a variety of projects; a multi-country journey highlights home-grown initiatives.
Morocco
Africa holds the world’s largest phosphate deposits, with total reserves at approximately 50 billion t. Morocco has 70% of that total – approximately 35 billion t – and thanks to state-owned OCP, the country is the world’s second largest producer of phosphate, after China. As part of its goal to supply affordable fertilizer to other African nations, OCP is working with the Nigerian government and industry associations to develop the country’s fertilizer manufacturing. Part of the plan is to construct a 750 000 tpy ammonia plant in Nigeria; OCP will also supply up to 1 million tpy of phosphate to create blends for domestic farm consumption. The initial plan calls for fi rst production in 2025.
Morocco also holds abundant deposits of potash. In March 2021, Emmerson PLC announced it was close to launching its Khemisset potash project in northern Morocco. The UK-based company is seeking to develop an estimated 537 million t of potash with an average grade of 9.24% potassium oxide (K2O). Output from the mine would average 735 000 tpy of K60 muriate of potash (MOP), and 1 million tpy of de-icing salt. The project has numerous fi nancial advantages: it is relatively shallow, at 450 m, and because it has no aquifer there is no cost to dewater shafts. It is the closest producer to major potash importer Brazil, as well as key European markets. Emmerson expects to break ground in late 2021, with fi rst production two years later.
Israel
Israel is leveraging industrial uses for natural gas after the discovery of major offshore fi elds in the Mediterranean. In late 2020, Haifa Group chose Saipem to build an ammonia plant at its Mishor Rotem industrial site in the Negev desert. The US$200 million plant will produce approximately 100 000 tpy of ammonia using Haldor Topsoe technology, and the output will primarily be used to make potassium nitrate fertilizer. Construction is expected to take three years.
Eritrea
Danakali continues to advance its Colluli potash project in Eritrea. In late 2020, the Australian-based company announced it had successfully completed assessment work on the solar and wind energy potential of the proposed open pit mine, confi rming that these renewable energy resources could be incorporated into future generation power in order to achieve a zero carbon footprint. The project is a 50:50 joint venture (JV) between Danakali and the Eritrean National Mining Co. (ENAMCO). Located 230 km southeast of Eritrea’s main port of Massawa, reserves have been estimated in excess of 1 billion t of 11% K2O. Colluli has been divided into two phases: Module I will have a capacity of 472 000 tpy of sulfate of potash (SOP), and Module II will double capacity to 944 000 tpy. The project is expected to be completed around 2023.
Jordan is a major producer of potash, using mineral-laden water from the Dead Sea to produce carnallite. The potash salt is obtained by pumping water into artifi cial basins and allowing it to evaporate (there is over 100 km2 dedicated to salt production in the region). In 2020, the Arab Potash Co. (APC) alone produced 2.4 million t using the evaporation method. Because the dyke that isolates APC’s artifi cial basin becomes porous over time, it has to be periodically reinforced. In early 2021, German-based Bauer International completed a 4.2 km cut-off wall to maintain impermeability at APC’s facility.
Egypt
Egypt, with its recent discovery of offshore gas (including the 30 trillion ft3 Zohr fi eld), is both a leading manufacturer of nitrogen (with 17 domestic plants), and an important consumer along the fertile Nile valley and Nile Delta. In June 2020, Austrian-based SBN completed construction of a 1050 tpd high-pressure stripper for NCIC’s ammonia plant at its Ain El Sokhana complex, 100 km southeast of Cairo. The new plant is expected to enter operation in 2022 and will have the capacity to produce 440 000 tpy of ammonia, 380 000 tpy of urea and 300 000 tpy of calcium ammonium nitrate.
Egypt’s Misr Phosphate Co. has begun construction of a new 1 million tpy phosphoric acid plant in Abu Tartur in the New Valley Governorate. Construction of the US$1 billion facility will be undertaken by a Chinese consortium; China’s Wengfu Group, one of the largest phosphate producers in the world, has signed a long-term contract to take approximately 500 000 tpy of output.
Saudi Arabia
Saudi Arabia’s SAFCO is a major fertilizer producer in the Gulf region. In 2020, it produced almost 6 million t of fertilizer (mostly urea and NPK blends), up from 5.55 million tpy in 2019. Most of the fertilizer is for the export market to major consumers, including North America, Europe and Asia. In early 2021, SAFCO formally changed its name to SABIC Agri-Nutrients Co. as part of a consolidation of fertilizer assets.
In late 2020, Saudi Arabia exported the world’s fi rst shipment of blue ammonia. The ammonia was produced by Saudi Aramco using conventional steam reforming, but the CO2 was captured and sequestered. Japan, which was the recipient of the 40 t shipment, will use it as carbon-free fuel in its utilities.
The country has also announced plans to build a multi-billion dollar megalopolis in the northwest tip of its sun-drenched environs. Among the many initiatives powered by sun and wind, NEOM will have a US$5 billion plant dedicated to producing green ammonia. Helios Green Fuels is a JV between the government-supported ACWA Power and US-based Air Products and Chemicals. The plan is to produce 650 tpd of hydrogen through hydrolysis, using 5 GW of renewable power, and then converting it to ammonia. Air Products will purchase the ammonia and ship it to customers around the world to be used in a variety of products. Analysts believe that the large-scale plant will be able to produce the ammonia for approximately US$1.50/kg by 2030.
Iran
According to GlobalData, a consultancy, Iran has an ammonia capacity exceeding 6.5 million tpy, thanks to abundant supplies of cheap natural gas. Capacity is expected to grow to 7.7 million tpy by 2030; the majority of growth will occur at the FALAT RCF GSFC JV ammonia plant in the industrial port of Chabahar, located in the Gulf of Oman.
Qatar
Qatar, with its vast reserves of natural gas, is the world’s largest exporter of LNG, but it is also a signifi cant nitrogen fertilizer manufacturer. The Qatar Fertiliser Co. (QAFCO) produces approximately 3.8 million tpy of ammonia and up to 5.8 million tpy of urea. The majority of urea is exported to 20 countries around the world to be used in fertilizer. In 2020, Industries Qatar purchased Qatar Petroleum’s 25% stake in QAFCO for US$1 billion, and Yara’s 25% stake for a further US$1 billion, making it 100% owner.
United Arab Emirates
In 2019, OCI and Abu Dhabi National Oil Co. (ADNOC) merged the companies’ fertilizer businesses in Egypt, Algeria and the United Arab Emirates to create the JV Fertiglobe. The new company has a production capacity of 5 million tpy of urea and 1.5 million tpy of ammonia, and a strong presence in both MENA and export markets, allowing it to economically promote agricultural growth in East Africa, Asia and Brazil. In April 2021, OCI and ADNOC confi rmed that the companies were considering an IPO in order to leverage cost advantages and opportunities for growth. As the JV noted, “Fertiglobe is underpinned by a young asset base and a robust storage and distribution infrastructure with access to key ports on the Mediterranean, Red Sea and Arabian Gulf.”
Oman
In 2005, the Oman Oil Co. entered into a JV with India’s Krishak Bharati Cooperative Ltd. (KRIBHCO) and Indian Farmers Fertilizer Cooperative (IFFCO) to supply urea to India. The JV, known as Oman India Fertilizer Co. (OMIFCO), built two urea trains in Qalhat, Sur, with a total capacity of 2 million tpy of urea for export to India at US$140/t, signifi cantly below market prices. In August 2020, OMIFCO entered into a three-year agreement with Swiss-based Ameropa to supply 1 million tpy of urea for export to South America, China and Southeast Asia. “OMIFCO has positioned itself strategically in the urea and ammonia market globally, and we are quite proud of that,” noted the company. “Now we have a great opportunity ahead of us; targeting new markets for the Omani urea.” OMIFCO has plans to build a third train with an additional capacity of 1.3 million tpy.
Challenges
In 2018, Algeria’s Sonatrach signed a US$6 billion contract with China’s CITIC Group to expand phosphate production in the Tebessa province by 9 million tpy of phosphate ore, up from current levels of approximately 1 million tpy. The country has since been rocked by civil unrest, however, placing increasing pressure on embattled President Abdelmadjid Tebboune. Weekly demonstrations by the Hirak mass protest movement have gripped major cities since April 2021, when the COVID-19 lockdown was lifted. Disenchanted citizens are seeking government reforms, democratic representation and an increase in living standards. International companies are increasingly reluctant to invest billions in the North African nation until issues are resolved.
Poor infrastructure in many MENA jurisdictions hampers the movement of raw materials and fi nished products from ports and manufacturing plants to food-growing regions. This raises the price of fertilizers for farmers and blunts the incentive to increase yields. Change is arriving slowly; since the end of a decades-long confl ict, Eritrea and Ethiopia are once again opening up and upgrading ports and roads. The 70 km road that connects the Eritrean port of Assab on the Red Sea to landlocked Ethiopia is being expanded to a four-lane highway. Eritrea has also hired DP World to manage its ports. The Dubai-based company is upgrading equipment and infrastructure at Assab and Massawa, which will facilitate the export of output from the Colluli potash mine to neighbouring countries.
The lack of agronomic support throughout the region is a signifi cant impediment to farming and fertilizer usage. Farmers lack knowledge regarding the specifi c needs of their soils, as well as an understanding of what types of fertilizers will benefi t their crops. Governments are partnering with international producers to help alleviate these issues. For example, Russian-based URALCHEM and Uralkali are working with the Sudanese government to build infrastructure in order to import and deliver fertilizer mixes, as well as address the country’s specifi c needs for knowledge and training.
Future
Much is being made of the move to use organic fertilizers to augment crops. It is currently a multi-billion dollar industry globally, and is growing in leaps and bounds. In Africa, plans are underway to leverage herd sources of manure for the benefi t of local farmers. However, in order to make a signifi cant impact, organic fertilizer has to be scalable. Paulee CleanTec, a technology company based in Tel Aviv, Israel, has patented a process that turns farm waste into organic, potash-rich fertilizer. The company notes that, in the US alone, farms generate 100 times more organic waste than humans, which can enter streams, groundwater and farmland if not treated. The oxidising process, which can be performed on farms, takes just one hour, and can turn manure into odourless, disease-free powder that can be stored for later use. This process is currently being tested at a farm in Israel and, should it prove to be effi cacious, in regions where it is diffi cult or expensive to access conventional fertilizers farmers can leverage organic sources to increase yields.
Conclusion
Throughout the MENA region, major projects are underway to build and operate domestic sources of nitrogen, potash and phosphate. This will allow farmers to access cheaper supplies of fertilizers, enhancing their ability to feed the burgeoning populations of their respective countries. Although the initiatives are encouraging, the region is urgently in need of signifi cant investment in infrastructure to complement the growth in home-grown supplies, as well as government initiatives to support agriculture through research, agronomics and fi nancial aid. In light of all of the above, international fertilizer companies have a critical role in augmenting fertilizer usage through imports and bespoke-blending of NPK to meet local crop and soil needs.
The Doyle and EMT Alliance
Can provide you with all the Blending, Bagging and Transport equipment you need.
Weighcont Blender
* Capacity of 20 to 200 ton per hour. * Unlimited number of hoppers. * Computer controlled. * Custom built. Fertilizer Inhibitor Treating Unit
* Portable. * Stainless steel. * Computer controlled. * High Capacity 120 m³ per hour.
EMT
