Fertz major EuroChem nears decision on new ammonia, urea, and methanol plants

Author: Richard Ewing

2019/07/31

KINGISEPP (ICIS)--EuroChem is nearing a final decision on ambitious plans for new ammonia, urea, and methanol plants in northwest Russia to serve international markets, two executives from the Switzerland-headquartered fertilizer group disclosed on Tuesday.

The green light for a 1m tonne/year ammonia facility; 1.1m-1.5m tonne/year granular urea plant; and a 1.8m tonne/year methanol manufacturing unit at Kingisepp could arrive before the end of this year, the officials confirmed.

The pair also confirmed that plans for a duplicate unit to generate feedstock for urea production are at an advanced stage.

“We are working on a second stage for the plant, involving new ammonia and urea units, and a third phase involving a methanol plant,” disclosed Ilya Beloborodov, EuroChem Northwest Director, during a media tour of the recently commissioned 1m tonne/year ammonia plant at EuroChem Northwest at the brownfield site near St Petersburg.

“We have the land and the natural gas pipeline capacity from Gazprom for the second and third stage, and are just 50km from the [Estonian] port of Sillamae to the west.

"We are also a similar distance from the Russian port of Ust Luga to the north, where our bulk terminal project is currently being executed.

“EuroChem has been looking at these proposals for the past 18 months when we realised just how many commercial opportunities this site has, and all the documentation has been readied."

Dmitry Boldyrev, EuroChem’s head of global operational logistics, hinted the group is looking to diversify its product portfolio as it looks to expand its global reach from its main markets in Europe.

While he did not put a figure on any potential capital expenditure for Kingisepp, the privately owned group recently said such investment would likely fall in the $2.5bn bracket.

“Methanol is very popular right now, and while we are a relatively small producer, we don’t want to put all our eggs in one basket [ammonia and urea] so it’s only logical to explore such opportunities," he said.

He added any new urea capacity would be in addition to existing production facilities, but declined to discuss where such urea would be sold.

Increasing demand for mineral fertilizers from Brazilian farmers and Russian agricultural users means both markets could be targets for any additional urea output, he suggested.