19 November 2013 16:07 [Source: ICIS news]
LONDON (ICIS)--Leading Algerian ammonia producer Fertial will be forced to shut down one of its plants in the next 72 hours if the government continues to delay the processing of export permits required to load nitrogen fertilizer cargoes, a market source said on Tuesday.
The North African manufacturer is preparing to take its Arzew facility offline later this week as it runs out of storage space amid a controversial new export authorisation process that has prevented any ammonia cargoes from loading for almost two weeks, a person with knowledge of the matter revealed.
The company, which has been operating its Arzew and Annaba plants at around 60% of capacity since July due to natural gas curtailments, usually loads around 60,000 tonnes of ammonia a month for export.
However, no product has been lifted from either site since 8 November when the 15,000-tonne capacity LPG tanker Nijinsky left Arzew with only around 8,000 tonnes for discharge in France for Norwegian fertilizer giant Yara International.
"The situation is still the same as last week and no-one can export any ammonia until permission is granted by the government which is still not forthcoming," the market source said.
"Fertial will have to stop production at its Arzew facility in the next 72 hours if it is unable to load any cargoes before then. The company's Annaba plant has more storage facilities so no decision as to that plant's operational status has yet been made."
Under the new process, companies wishing to export ammonia or urea from Algeria must now apply in person at the Ministry of Energy and the Ministry of Defence in the capital, Algiers.
The applications must include specific details of the buyer, vessel, destination, end-user and purpose, with the matter complicated by traders often not knowing well in advance where such cargoes will be delivered.The red tape has also impacted granular urea and ammonia loadings at the new $2bn (€1.48bn) Sorfert plant, also in Arzew, but neither the producer or parent OCI Nitrogen NV was available for comment on Tuesday.
Netherlands-headquartered OCI planned to load 15,000 tonnes of ammonia on the LPG tanker Navigator Galaxy last weekend for delivery to long-term customers in Europe.
($1 = €0.74)
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