Gulf fertiliser producers must diversify their portfolios to include more phosphates in order to withstand future oil and gas feedstock challenges, warns the Gulf Petrochemicals and Chemicals Association (GPCA).

Hydrocarbon feedstocks are becoming more expensive for the GCC’s fertiliser makers due to increasing demand for the same products for power and water desalinisaton.

“GCC producers must diversify their fertiliser portfolio to include more phosphate fertilisers, as this will decrease their reliance on hydrocarbon feedstock and grow their share of export markets,” said GPCA secretary-general Abdulwahab al-Sadoun speaking at the GPCA Fertiliser Convention. “Phosphate fertilisers require less natural gas to produce and are a relatively untapped resource in this region.”

Nitrogen-based fertiliser has grown quickly in the region based on an abundance of low-priced natural gas. The GPCA forecasts that production of nitrogen products will reach 13 million tonnes a year (t/y) of ammonia and 16.5 million t/y of urea by 2020.

By contrast, the region only has the capacity to produce 3.4 million t/y of phosphate fertilisers, which is set to increase to 5.5 million t/y by the end of the decade.

“With analysts predicting that Asian markets currently account for nearly 60 per cent of global phosphate demand, strategic additions in phosphate capacity here in the Gulf will solidify the favourable position that GCC fertiliser producers currently enjoy,” says al-Sadoun.

Saudi Arabian Mining Company (Maaden) is adding 1.5 million t/y of phosphate rock capacity at its $7bn Waad al-Shamal Phosphate City development, which is expected to be completed by 2016.