UpdateSaudi Arabia's MPC halts DAP production; ammonia plant shut

29 April 2013 11:33  [Source: ICIS news]

(adds detail on ammonia shipments)

Ma’aden Phosphate Co (MPC) halted production of DAP SINGAPORE (ICIS)--Ma’aden Phosphate Co (MPC) halted production of diammonium phosphate (DAP) at Ras Al Khair in Saudi Arabia as an upstream ammonia plant at the site had to be taken off line days after the unit restarted because of technical problems.

“MPC has encountered technical difficulties during the start-up of its ammonia plant which led into the ammonia plant shutdown,” the company’s parent firm Saudi Arabian Mining Co (Ma’aden) said on Monday in a filing to the Saudi Stock Exchange.

The ammonia plant was restarted on 20 April, following an unexpected shutdown on 1 April, during which time, the DAP plant continued to operate as MPC had enough ammonia inventory.

This time, however, the DAP plant has temporarily discontinued production until the ammonia plant can restart, Ma’aden said.

The Ras Al Khair site can produce about 3m tonnes/year of granular DAP with an ammonia surplus of 400,000 tonnes/year, according to the company’s website.

“MPC will use the shutdown as an opportunity to carry out scheduled maintenance [at the unit] due in May which should help to reduce the financial impact expected in the second quarter 2013,” Ma’aden said in the statement.

MPC is a 70:30 joint venture between Ma’aden and Saudi petrochemical giant SABIC.

SABIC on Monday said it expects the latest shutdown to have "some impact on ammonia shipments" but declined to provide further details except to say it did not plan to cover any potential shortfall with spot purchases.

On 17 April, SABIC revealed it planned to load 107,000 tonnes of ammonia in Jubail by 17 May for long-term contract customers in India, south-east Asia and Asia Pacific.

LPG tankers the Gaz Millennium and the Camberley were due to lift 15,000 tonnes and 23,000 tonnes, respectively, on 26 April but it is not known if they loaded as planned.

LPG tanker the Al-Jabirah was due to lift a 23,000-tonne cargo on 6 May for south-east Asia, followed by the Rose Gas and Al-Barrah on 10 May and 17 May, respectively, with both cargoes destined for Asia Pacific. SABIC has yet to confirm if those shipments will load as planned.

Adding to the ammonia supply squeeze in the region is a seven-week shutdown of Saudi Arabian Fertilizer Company's (SAFCO) ammonia line No.2 that started on 16 April. SAFCO's ammonia line No.4 underwent a two-week turnaround in early April and restarted as planned on 15 April.

According to SABIC, the two SAFCO turnarounds are expected to result in a combined loss of 60,000-70,000 tonnes of ammonia output.

Before today's announcement, SABIC said it did not expect to have any spot ammonia availability until June.

Spot ammonia prices in the Arabian Gulf are currently in the $535-550/tonne (€412-423/tonne) FOB (free on board) range.

($1 = €0.77)

Additional reporting by Richard Ewing

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Pearl Bantillo
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