Oman’s OMIFCO ships first urea vessel to Brazil for Ameropa

LONDON (ICIS)–Oman Oil Trading Limited (OQT) has entered into a three-year offtake agreement with Switzerland-based fertilizer trader Ameropa for the supply of granular urea from Oman India Fertiliser Company’s (OMIFCO’s) plant.

Ameropa’s first vessel from the offtake, Sagar Kanta, completed loading 49,500 tonnes of granular urea on 2 August and is on its way to Brazil, the trader confirmed.

The move solidifies Ameropa’s position as the world’s leading urea trading company and helps it gain additional market share in strategic regions, said the trader.

Along with Ameropa, OQT and OMIFCO have signed offtake agreements with two other traders for a three-year period.

OMIFCO Oman Annual Offtake Contracts (TBC) July 2020- July 2023
Buyer	Quantity in tonnes
Ameropa	1m
Yara	400,000
Swiss Singapore	300,000
Total	1.7m

The pricing of the tonnes is on a formula basis, believed to be at a discount to Arab Gulf levels.

Any additional availability is expected to be sold by OQT to offtakers or on a spot basis.

The OMIFCO urea and ammonia plant started production on 14 July 2005 at the Sur Industrial Estate in a joint venture between the governments of Oman and India.

Under the agreement, the entire production of around 2m tonnes/year was supplied to India at $135-140/tonne FOB (free on board) for a period of 15 years.

India did not extend the agreement beyond 14 July 2020. OMIFCO then signed new agreements with traders at a higher-priced formula than its contract with the Indian government.

OMIFCO is owned 50% by Oman Oil Company, 25% by Indian Farmers Fertiliser Cooperative Limited (IFFCO) and 25% by Krishak Bharati Cooperative Limited (KRIBHCO).

The plant has the capacity to produce 2 x 1,750 tonnes/day of ammonia and 2 x 2,530 tonnes/day of granular urea from its two urea plants.

Annual granular urea exports are around 2m tonnes as the plant often produces above capacity.

OQT is a fully-owned subsidiary of state-owned Oman Oil Company, and markets urea and ammonia on behalf of OMIFCO.

OMIFCO ammonia is also exported on a regular basis by offtake partner Trammo.

The trader loaded around 180,000 tonnes at Sur in 2019 under the pair’s long-term agreement, although this year, the producer also sold material on a spot basis.

While some of the extra surplus that went to IFFCO in India was due to urea plant shutdowns, OMIFCO volume has also loaded recently for Ma’aden and SABIC via swaps/spot deals.

It is unclear when OMIFCO’s ammonia offtake deal with Trammo will end amid talk other companies have approached the manufacturer about a similar arrangement.

Additional reporting by Richard Ewing