Kuwait has a long-term plan to exit the fertiliser business, Hashim al-Rifai, managing director of planning at Kuwait Petroleum Corporation (KPC) told delegates at MEED’s Kuwait Projects 2010 conference in Kuwait City.
“The idea is that it should be sold off to the private sector,” a source close to the company tells MEED, although it is not clear if this will be in part or wholly.
The fertilisers business is now making money, the source said. Prices for urea and ammonia have increased between 15 and 19 per cent from the beginning of the year, according to New York-based consultants, Alembic Global.
Neither KPC or its subsidiary Petrochemical Industries Company (PIC) has indicated a timeframe to exit the business.
The Bahrain-based Gulf Petrochemical Industries Company (GPIC) is a joint venture of Kuwait’s PIC, Saudi Arabia’s Saudi Basic Industries Corporation (Sabic) and Bahrain’s National Oil and Gas Authority.
The company currently produces 475,000 tonnes a year (t/y) of ammonia, 660,000 t/y of urea, and more than 1.5 million t/y of methanol at its facilities on Sitra Island in Bahrain.
GPIC is planning to build a new ammonia/urea production unit, but has put the project on hold while the government of Bahrain allocates gas feedstock for the scheme. Planned for start-up in 2013, the plants will have a capacity of 3,200 tonnes a day (t/d) of urea and around 2,000 t/d of ammonia.