Algeria's Fertial declares force majeure due to gas curtailments

15 July 2013 14:16  [Source: ICIS news]

LONDON (ICIS)--Leading Algerian ammonia producer Fertial has been forced to declare force majeure after natural gas curtailments of "at least 30%" were imposed by the state-run energy authority until 30 September, market sources revealed on Monday.

The company normally produces a combined 2,800 tonnes/day of ammonia from its facilities at Annaba and Arzew, but that figure fell to 1,800 tonnes/day at the end of last week following a reduction in natural gas supplies.

As a result, Fertial is now only likely to export 35,000-40,000 tonnes a month compared to the usual 60,000 tonnes, the market source explained, adding that it is the first time such a restriction has been imposed on the producer by the Autorite de Regulation des Hydrocarbures (ARH).

The ARH decision has also triggered speculation as to whether Algeria is sufficiently prepared for the imminent start-up of the $2bn (€1.54bn) Sorfert nitrogen fertilizer plant and if additional investment in gas infrastructure is needed.

The natural gas curtailments come just six weeks after Fertial awarded Norwegian fertilizer giant Yara under its sales tender for 200,000 tonnes of ammonia.

The manufacturer, a joint venture between Spain's Fertiberia and Algeria's Asmidal, has hoped to produce 840,000 tonnes of ammonia this year but that figure will now have to be adjusted downwards.

Fertial usually exports around 80% of its ammonia output, with a record 750,000 tonnes exported in 2012.

($1 = €0.77)

By: Richard Ewing
+44 208 652 3214

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