Major $2bn fertilizer plant in Peru on course for 2017 start-up

23 September 2013 20:19  [Source: ICIS news]

MONTREAL (ICIS)--Plans for a $2bn (€1.48bn) exported-oriented nitrogen fertilizer plant in Peru are on course to be realised in late 2017 or early 2018, the senior executive from the Spanish company behind the ambitious project revealed on Monday.

Speaking on the sidelines of annual conference of The Fertilizer Institute (TFI) in Canada, Fertiberia's Enrique Palomino also revealed for the first time that the plant could eventually include monoammonium phosphate (MAP), diammonium phosphate (DAP) and ammonium nitrate (AN) production units.

While details of this potential “second phase” phosphate and nitrate facility are still being finalised, they would likely include a 400,000 tonnes/year AN line that would generate sufficient product from the 400,000 tonnes of merchant ammonia to ensure Peru would not need to import the highly explosive material, which is heavily used in the country’s mines.

Upon completion of the first phase of the plant, which will be situated in the northern region of Piura or southern region of Pisco, the facility will produce up to 3,500 tonnes/day of urea and 3,300 tonnes/day of ammonia, equivalent to 1.2m tonnes/year and 1.1m tonnes/year, respectively.

According to Palomino, who is the project's director general, 700,000 tonnes of ammonia will be used as a urea feedstock and the remaining 400,000 tonnes exported to buyers in countries such as neighbouring Ecuador, Chile and Colombia, as well as Venezuela, Mexico and the US.

Similarly, only 30% of the plant’s urea production is earmarked for sale in Peru, with the remaining 800,000 tonnes destined for export to elsewhere in South America and further afield to Mexico and the US, he explained.

A final decision over where the plant will be constructed will be made once in-depth tests of natural gas reserves are completed over the next few months. If situated in the gas-rich Piura region, the facility would most likely be built at Paita – home to Peru’s second largest port and close to onshore reserves – or Talara further up the coast, close to offshore supplies.

“The plant will take between 38 and 40 months to construct, and I believe it’s realistic to think that the first ammonia and urea will be produced in the final few months of 2017 or very early 2018,” Palomino said.

“The initial plan is to export all of the ammonia not used for urea production, but if a second phase is incorporated two or three years after the first phase, then that 400,000 tonnes/year of ammonia could potentially be used for the manufacture of AN, DAP and MAP instead," he added.

The plant will be the first nitrogen fertilizer facility situated on the Pacific Coast in North, Central or South America, meaning it will be open up new markets and help grow existing ones, Palomino said.

Despite agriculture being a key source of foreign revenue and employment, Peru is heavily reliant on fertilizer imports, which means that farmers and distributors are more exposed to currency fluctuations and delays to shipments.

Part of the large Grupo Villar Mir, Fertiberia holds a stake in three Algerian ammonia plants run by Fertial that export several hundred thousand tonnes/year of ammonia to Europe, including to its own processing facilities in Spain and Portugal.

($1 = €0.74)

By: Richard Ewing
+44 208 652 3214

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