Algeria’s Sorfert halts urea, ammonia production on export delays

25 November 2013 16:56  [Source: ICIS news]

LONDON (ICIS)--Algeria's Sorfert has completely halted urea and ammonia production at the $2bn (€1.48bn) plant as it remains unable to load nitrogen fertilizer cargoes for the third straight week due to a lengthy new export permit process that has already impacted operations at local ammonia manufacturer Fertial, a market source said on Monday.

Sorfert is understood to have stopped all production activities because its urea warehouses and ammonia tanks are full and there is little indication as to when the government may issue the required export licences.

"The situation is unchanged and there is no clarity on the export licence. It could take more time than previously estimated," the source said.

Sorfert can produce around 100,000 tonnes/month of urea at full capacity. The shipments that have been affected are as follows:

  •        25,000 tonnes to Agrium at around $316/tonne FOB (under 14 October tender) for first half November loading
  •        20,000 tonnes to OCI (under 21 October tender) at $321.45/tonne FOB, for November shipment
  •        Spot sale of 20,000 tonnes to a Sonatrach affiliate at $323-325/tonne FOB, for November shipment
  •        2 x 15,000 tonnes at $330/tonne FOB for second half December loading

Meanwhile, Fertial stopped ammonia production at one of its two ammonia lines at its Arzew plant over the weekend and the second unit will likely go offline in the next three days, another market source disclosed.

"No Fertial or Sorfert ammonia cargoes have loaded in the past few weeks and the government has yet to decide on the export applications and, frankly speaking, I don't see any decision being made for another 48-72 hours at least which means the next cargoes almost certainly won't load until early December," added the source.

LPG tanker Navigator Galaxy had been due to load up to 15,000 tonnes of Sorfert ammonia over the weekend but is now heading to Yuzhny, Ukraine, to lift a Black Sea cargo instead for OCI Nitrogen.

Based in Arzew, Sorfert started granular urea production in September this year. Netherlands-headquartered OCI owns 51% of the company while Algeria's state-run Sonatrach holds the remaining 49% stake.

($1 = €0.74)

By: Deepika Thapliyal
+44 208 652 3214

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