Major fertilisers project launched in Suez

26 September 2003
The local Arab Fertilisers & Chemicals Company (Afcco) has appointed Bahrain-based Arab Banking Corporation (ABC) to act as financial adviser for the first phase of a major $1,100 million petrochemicals project to be developed by the Joint Arab Investment Corporation of Abu Dhabi in Western Suez, close to the southern mouth of the Suez Canal. ABC is the first company to be signed up for the project, which will initially involve construction of an estimated $350 million NPK fertiliser plant. Afcco is understood to be close to awarding the consultancy and legal advisory mandates for the first phase.

Site preparations are expected to start before the end of the year for the NPK plant, which will produce some 1 million tonnes a year (t/y) of high-grade NPK fertiliser and 600,000 t/y of calcium nitrate fertiliser. Raw materials, including phosphate and potash, will be sourced from local suppliers, and Afcco is understood to have reached a preliminary agreement with the government for supply of the natural gas feedstock. Construction of the first phase is due to be completed in 2006.

ABC is now actively marketing the project to potential investors in the Gulf and Europe. 'This is an extremely exciting project, and we already have a lot of interest, mainly because the basic structure of the project is so sound,' says Tarek Akel, ABC vice-president for global project finance.

Later stages of the integrated chemicals complex will include a worldscale $500 million ammonia/urea plant and a second $250 million NPK plant, which will have the same capacity as the first phase. A 1.4 million-square-metre greenfield site has been allocated for the project, which will be subject to free zone rules requiring the company to export a minimum of 50 per cent of its total output. 'Given the location, in terms of exporting and sourcing raw materials, and the fact we have utilities already in place, this has superior economics to almost anything we have done before,' says Akel. 'So wherever we choose to export we are looking at very competitive prices.'

Established under a joint government co-operation agreement in Cairo in 1978, JAIC is owned by the Abu Dhabi Investment Authority.

'The aim of this inter-regional project is to produce the largest single fertiliser facility in the world,' said Salah Abdel-Karim, project developer for Afcco, who was speaking at MEED's 2nd Medterranean Gas Congress in Cairo on 23 September.

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