IFA' 13: Sorfert Algeria suffers fresh start-up delay, admits OCI

21 May 2013 21:29  [Source: ICIS news]

CHICAGO (ICIS)--Urea and ammonia production at the new $2bn (€1.6bn) Sorfert Algeria plant has suffered another delay due to local red tape despite the facility being ready for commissioning for several months, a senior executive of parent Orascom Construction Industries (OCI) revealed on Wednesday.

Speaking on the sidelines of the International Fertilizer Industry Association (IFA) annual conference in Chicago, the executive expressed frustration at the latest delay, which came just three weeks after the company announced it planned to commence production during the current second quarter.

"The best-case scenario is we begin commercial urea production in the third quarter," he said. "We are waiting for the necessary export and operational licences to be granted by the Algerian authorities. Construction of the plant is complete and it's ready to start production once we have permission, which we hope will be given soon."

The facility will produce 800,000 tonnes/year of merchant ammonia and 1.2m tonnes/year of urea for export once fully operational. OCI holds a 51% stake in the joint venture, with Algeria's state-owned oil and gas producer Sonatrach possessing the remaining 49% share.

The Arzew-based plant will initially focus on urea production, which uses ammonia as its key feedstock, although both nitrogen fertilizers should be available for export before the end of 2013, the executive said.

"Ammonia and urea will be sold through our Dubai-based trading arm," the executive added, without disclosing further details about possible supply agreements. "We hope to begin exporting ammonia in the fourth quarter, as we will concentrate on urea exports first."

Given the reduced freight costs from Algeria, compared with the key Ukrainian port of Yuzhny, potential destinations for the plant's ammonia output include the US, Latin America, Morocco, Tunisia, northwest Europe, and Asia Pacific countries such as India, Korea, Taiwan and Japan.

($1 = €0.78)

By: Richard Ewing
+44 208 652 3214

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