IFA 2018: Mitsubishi eyes first export cargo from Indonesian ammonia plant

Source: ICIS News

2018/06/19

BERLIN (ICIS)--Mitsubishi hopes to lift within weeks its first ammonia export cargo from the delayed PT Panca Amara Utama (PAU) plant in Indonesia, a source at the Japanese fertilizer trader said on Tuesday.

With two ammonia tankers arriving in Asia Pacific next month, the Tokyo-based company is optimistic at least one of those vessels will make the inaugural voyage from the $830m project at Luwuk port, Banggai regency.

Now in final commissioning, the 660,000 tonne/year plant was due to start commercial operation in late 2017.

The start date was pushed back several times for unspecified reasons, leaving exclusive offtake partner Mitsubishi with little choice but to source spot cargoes from other countries at unfavourable prices.

“We expect commercial operations soon, but we don’t know exactly when,” disclosed the source on the sidelines of this year’s International Fertilizer Association (IFA) annual conference in the German capital.

"The plant is producing commercial grade ammonia, but only at low rates, with capacity due to increase very shortly."

The source added contingency plans are in place should the facility fail to start within the next month, with the 40,000-tonne capacity LPG tanker BW Nice, and the 23,400-tonne capacity LPG tanker SCF Tomsk, likely to load instead in the Arabian Gulf or the US.

An alternative fall-back option is spot CFR (cost and freight) deals with rival traders, although no such deals have yet been heard by market participants in Berlin.

Mitsubishi handles around 600,000 tonnes/year of ammonia, supplying long term customers in countries such as South Korea, Taiwan, China and Thailand.

PAU is a joint venture between Indonesia's PT Surya Esa Perkasa and Japan's Mitsubishi Corp.

The joint venture produces fertilizers and other chemical products, using natural gas from the Senoro-Toili fields (Donggi-Senoro) in central Sulawesi.