Ukraine’s OPZ signs surprise gas tolling deal for ammonia/urea

LONDON (ICIS)–In a major shake-up of the nitrogen fertilizer industry in the Black Sea, Ukrainian producer Odessa Port Plant (OPZ) has signed a surprise gas-for-fertilizers deal – tolling agreement – with Austria-based Antra, a source at the commodities trader confirmed on Thursday.

In return for supplying an undisclosed amount of natural gas as feedstock, Vienna-headquartered Antra will receive a “very significant share” of the ammonia and urea manufactured at the state-owned supplier each month.

With two ammonia lines and two urea units, OPZ has the capacity to produce 60,000-70,000 tonnes/month of urea and 40,000-50,000 tonnes/month of ammonia, with the cargoes loaded at the nearby port of Yuzhny.

In addition to selling some of the fertilizers directly, OPZ output has usually been sold through third parties such as Switzerland-based Nitora Commodities and Kiev-headquartered Newscope.

While details of how much natural gas will be supplied to OPZ in return for the crop inputs have not been disclosed, the person with knowledge of the matter confirmed the deal was effective 1 November.

“I can confirm we are now in a contractual relationship with OPZ and while it is not an ‘exclusive’ agreement, we will handle a very significant share of its ammonia and urea output,” the source said.

“We will take a vast chunk of ammonia and urea each month and value traders as much as final customers so would be happy for people to approach us.

“There is an overlap of contracts that have been entered into and customers will receive all their deliveries of OPZ product as planned.”

The source would not be drawn on how Antra plans to distribute the fertilizers and whether such shipments would involve Nitora.

Previously, OPZ received natural gas from local incumbent Naftogaz, with most of the feedstock sourced from Russia’s Gazprom.

No-one at OPZ could be reached for comment on Thursday.

Deepika Thapliyal contributed to this article