magazine | november/december 2018
TRANSCRIPT
MAGAZINE | NOVEMBER/DECEMBER 2018
TOPSOE FURNACE MANAGER
MAGAZINE | NOVEMBER/DECEMBER 2018
TOPSOE FURNACE MANAGER
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ON THE COVER
CONTENTS
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03 Comment
05 World News
10 Advancements in the Asian Fertilizer MarketPriyanka Khemka, Nexant, details the consumption and capacity developments of nitrogen fertilizers in Asia.
14 When Stars AlignGordon Cope details a number of recent developments that have given cheer to the fertilizer sector.
19 Control the BurnScott W. Sexton, Haldor Topsoe Inc., discusses how digital furnace firebox monitoring technology can extend a machine’s lifecycle and improve personnel safety.
26 Ensuring the Food of the FutureOlivier Gazeau, FINDER, discusses the effective use of plunger and centrifugal pumps in helping to improve the production of fertilizers and increasing crop yield.
30 A Critical Choice Annette van Dorp, Bungartz, discusses the importance of choosing the right centrifugal pumps for use in the fertilizer industry.
36 A World of Sulfur AK Tyagi, Nuberg EPC, India, takes a detailed look at the production of sulfur and provides a case study on a plant installation in Egypt.
42 An Inside JobVorobiev Alexander and Anderzhanov Rinat, NIIK, Russia, explain how internal urea reactor devices can help to improve efficiency in urea plants.
47 The Digital RevolutionRobert Waggeling, Microtrac GmbH, discusses the implementation of online real-time dynamic image analysers and their use in the manufacture of urea.
53 Reducing Safety HazardsPrem Baboo, National Fertilizers Limited, Mark Brouwer and Jo Eijkenboom, UreaKnowHow.com B.V., and Majid Mohammadian, OCI N.V., discuss the implementation of The Risk Register’s recommended prevention and mitigation measures to improve safety in urea plants.
57 Material Flow InnovationsTim Patrick O’Harran, Martin Engineering, discusses the reduction of downtime and safe improvements when innovating and upgradingmaterial flow measures.
63 A Specialised SolutionOscar Johansson, Sandvik, USA, and Daniel Gullberg, Sandvik, Sweden, present a new and specialised stainless steel that is enhancing urea production.
67 Crucial DevelopmentLaura Hayward, AGI, expresses the necessity of investing in Africa’s fertilizer industry.
70 The Future is AIFred Coelho, Bagtech, South Africa, reviews the design and development of the largest capacity fertilizer blending plant in Africa.
72 FactsThis month we give you 15 facts on Asia.
Haldor Topsoe is a world leader in catalysis, helping its customers achieve optimal performance to get the most out of their processes and products, using the least possible energy and resources with sustainable technologies.
Its solutions address pressing global challenges, improving energy efficiency, and enhancing food production for the world’s growing population. Topsoe’s Furnace Manager shown on the front cover provides improved personal safety, operational excellence, and energy efficiency.
For more information visit: www.topsoe.com.
1514
Fertilizers are a vital component of modern agriculture. According to Nutrien, a Canada-based fertilizer producer, the world consumed approximately 191 million t of NPK fertilizer during the 2017 – 2018 growing season. Over half
the world’s fertilizer was consumed in East Asia and South Asia (approximately 103 million t), while North America consumes 13%, or 25 million t.
The fertilizer sector is also buffeted by an impressive spectrum of challenges. Producers strive to accommodate short-term vagaries (weather, regional policies, and crop price fl uctuations), as well as longer-term trends (the growth in world population and changes in diet). Throughout the world, projects totalling billions of dollars in new capacity investment hang in the balance, hobbled by an extended commodity down-cycle.
Fortunately, there are signs that fertilizer’s fortunes may soon improve. “In general, the wave of new capacity has come and gone, and the sector is no longer being swamped,” said a senior industry analyst. “For nitrogen, new capacity is incremental, and not a tidal wave. Phosphate is not seeing a lot
Gordon Cope details a number of recent developments that have given cheer to the fertilizer sector.
of new capacity, and potassium is seeing steady increments. Overall, supply growth and demand growth are close to matching.”
NitrogenNitrogen is the cornerstone of the fertilizer sector. According to the International Fertilizer Association (IFA), nitrogen demand has grown from 102 million tpy in 2014 to an estimated 107.3 million t for the 2018 – 2019 growing season.
China produced 46 million t of ammonia in 2016. Most of this was converted to urea and ammonium nitrate (AN). Although urea exports reached 13.8 million t in 2015, exports have been falling as a combination of higher coal feedstock
prices, stricter environmental regulation policies, and a government focus on domestic consumption. It is estimated that China exported less than 5 million t in 2017. Industry analysts expect urea exports in the 2 – 3 million t range in 2018, and even less in 2019.
The Chinese Nitrogen Fertilizer Association (CNFA) predicts that members could shut down up to 13 million tpy of older urea capacity by 2020. Whether China eventually replaces all its former export capacity with new, effi cient plants may hinge on several factors, including domestic demand for natural gas. The country uses slightly less than 24 billion ft3/d of gas, and relies upon imports for 40% of its natural gas needs. During the cold winter of 2017 – 18, a shortage of gas in northern China led to a 14
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COMMENTJAMES LITTLE, MANAGING EDITOR
NOVEMBER/DECEMBER 2018 | WORLD FERTILIZER | 3
MANAGING EDITORJames [email protected]
EDITORIAL ASSISTANTRobyn [email protected]
ADVERTISEMENT DIRECTORRod [email protected]
ADVERTISEMENT MANAGERChris [email protected]
ADVERTISING EXECUTIVEDavid [email protected]
PRODUCTIONHayley [email protected]
SUBSCRIPTIONSLaura [email protected]
WEBSITE MANAGERTom [email protected]
DIGITAL EDITORIAL ASSISTANTNicholas [email protected]
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CONTACT US “The future is green: the future is ammonia…”
Could ammonia be the panacea for two of the greatest challenges facing the 21st century: food and energy? Fertilizers Europe explores this question in a recently published 68 page report entitled, “Feeding Life 2030:
The European fertilizer industry at the crossroads between nutrition and energy”. The report looks at both how to feed a growing global population as efficiently as possible, as well as tackling climate change and perhaps providing a whole new means of producing and transporting energy.
It is widely recognised that mineral fertilizers feed approximately 50% of the world’s population. It is also estimated by the United Nations that by 2030 the world’s population will exceed 8.6 billion people. This is a billion more hungry people than are on the planet today and equates to an annual increase of 80 million people a year.
Ammonia produced via the Haber-Bosch process is the building block of all fertilizers but unfortunately it is also extremely energy intensive, consuming over 2% of the world’s energy and generating over 1% of global CO
2 emissions. It is widely accepted that to keep global
warming under the 2°C target by 2100, humankind must emit no more than 600 billion t of additional CO
2. Fertilizer manufacturers have successfully cut harmful emissions by 40% over
recent years and farmers and growers have, and will, continue to focus on optimising overall fertilizer application and increasing yields. However, if the European Commission sets a target of zero emissions across all economic sectors by 2050 as it is currently proposing, then radical change is required in the manufacture and production of nitrogen fertilizers.
Whilst the Haber-Bosch process heralded the dawn of the Green Revolution a little over 100 years ago, ammonia synthesised using hydrogen derived from the electrolysis of water and powered by renewable resources could be the next great leap forward. This process is reliant on huge amounts of renewable electricity and Australia is leading the way with plans to build a US$10 billion combined wind and solar plant in Western Australia. Part of the 9000 MW of energy that will be produced by this project could be used to generate ammonia via the electrolysis of water for long-distance export. In this way, ‘green ammonia’ becomes more than merely decarbonised fertilizer. Because it liquefies easily under light pressure and chilling, it offers a means of storing and transporting renewable energy. Once the ammonia is transported across the ocean, much like LNG is today, to a power plant capable of burning ammonia, it can be used to generate carbon-free electricity and quite possibly replace LNG in the energy transportation market. It can also be converted back into hydrogen for use in fuel cell vehicles. Though not hugely popular in much of the world, in Japan there remains a huge market for fuel cell technology with an anticipated 800 000 vehicles in service by 2030, up from 2500 today.
Whilst the process is currently in its infancy, the potential to use renewable energy and water to produce inexhaustible supplies of carbon-free power, not to mention fertilizer, is huge. The Fertilizers Europe report can be read in full at www.fertilizerseurope.com/feeding-life-2030.
This final issue of 2018 includes a keynote article by regular contributor, Gord Cope, looking at current trends in the fertilizer sector and a regional report from Nexant on the Asian fertilizer market plus features on urea technology and blending, handling, and storage of fertilizers. We hope you enjoy this issue and look forward to reconvening in 2019.
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WORLD NEWS
NOVEMBER/DECEMBER 2018 | WORLD FERTILIZER | 5
The technology company The Linde Group has signed a contract with US industrial gas company,
Praxair Inc., to supply a hydrogen plant that will be part of the company’s US Gulf Coast hydrogen system, which spans Southeast Texas and Western Louisiana.
“We are very pleased to have won this important contract from Praxair to provide the largest hydrogen production unit in Linde’s history,” said Dr Christian Bruch, Member of the Executive Board of Linde AG and responsible for the company’s plant engineering business. “We attribute this success to our compelling and customer-oriented engineering solutions.”
Linde’s Engineering Division is responsible for the design and supply of the equipment for the core components of the hydrogen plant. The order includes the steam-methane
reformer, designed and supplied by Linde’s subsidiary Selas Linde in Blue Bell, Pennsylvania, the pressure swing adsorption unit, and the balance of the core plant. The plant will have a production capacity of over 190 000 Nm3/hr of high-purity hydrogen and will also generate steam. The new plant will be highly modularised with world-class reliability and energy efficiency and is scheduled to come on stream in early 2021.
In the 2017 financial year, The Linde Group generated revenue of e17.113 billion, making it one of the leading gas and engineering companies in the world, with approximately 58 000 employees working in more than 100 countries worldwide. The company is committed to technologies and products that unite the goals of customer value and sustainable development.
US Linde receives hydrogen plant order from Praxair
JORDAN Nutrien closes sale
Jacobs Engineering Group Inc. received an engineering, procurement, and construction (EPC) contract from
Sirius Minerals PLC for its new materials handling facility (MHF) in Teesside, England.
The MHF is being constructed as part of the company’s North Yorkshire Polyhalite Project, which will supply a unique type of potash fertilizer.
Fertilizers play an important role in the agriculture industry and in food supply, providing the nutrients required for healthy plant growth. Polyhalite is a unique mult-nutrient mineral containing four of the six macro-nutrients that plants need: potassium, sulfur, magnesium, and calcium. The MHF will crush the polyhalite ore from the mine near Whitby, England, and granulate it for use in agricultural equipment before sending it to the nearby dock for shipping.
“As the EPC provider for Sirius Minerals’ materials handling facility, Jacobs is delivering more than a full life cycle solution on this project—we’re delivering a facility that is scalable and able to support changing agriculture needs,” said Andrew Berryman, Jacobs Mining, Minerals, and Technology Senior Vice President and General Manager.
“From the run of mine stockpile to the final product loadout, the materials handling facility will contribute to local and global food supply.”
Jacobs is designing the MHF to handle 7 million tpy of granulated product in its first phase of development, with expansion considerations being developed into the design to support up to 20 million tpy of the granulated product. In addition, the facility will also handle 3 million tpy of coarse product.
“Securing a partnership with a company the calibre of Jacobs is great for us and a testament to the world-class nature of this project,” said Simon Carter, Sirius Minerals Chief Development Officer. “Their knowledge of EPC projects in the mining sector is hugely valuable, as is their experience of construction projects on Teesside.”
Through the development of its North Yorkshire Polyhalite Project, the world’s largest and highest-grade deposit, Sirius Minerals will become a leading global producer of polyhalite. At full production, the project will create over 1000 direct jobs and many more indirectly, and has the potential to generate over £2 billion of annual exports for the UK.
UK Jacobs awarded Sirius Minerals’ contract
Nutrien Ltd. has announced that it has completed the sale of its minority equity investment in Arab Potash Company
to SDIC Mining Investment Co. Ltd. for gross proceeds of US$502 million.
Completion of the Arab Potash Company sale was required by the Competition Commission of India and Ministry of Commerce in China in providing their clearance for the merger of Agrium and PotashCorp to form Nutrien.
WORLD NEWSIN BRIEF
6 | WORLD FERTILIZER | NOVEMBER/DECEMBER 2018
NEWS HIGHLIGHTS
• Nutrien announces permanent closure and impairment of New Brunswick potash plant
• ABP’s Port of Immingham welcomes large fertilizer shipment
• Jacobs sells Energy, Chemicals, and Resources business to WorleyParsons for US$3.3 billion
Visit our website for more news:
www.worldfertilizer.com
Casale has announced the award of a contract from Messrs. TogliattiAzot
(TOAZ), Russia, for the supply of new 2200 tpd urea plant.
This will be the third urea line for the Russian fertilizer producer, and one of the largest in the world, and it will be located at their site in Togliatti, Samara region, near two existing plants. With the new line, the total urea production will increase by 70%.
The kickstarting ceremony was held in October with the presence of all stakeholders of the project. The plant is set for completion in the 2Q21. Casale
will provide the proprietary know-how, all engineering, and the supply of offshore equipment and materials.
Casale’s sister company, Casale Project AS, based in Prague, will be responsible for the supply of the onshore equipment and all construction works at site.
This plant is the third in a row that Casale has acquired in Russia in the last 2 years, with two others commissioned for a different customer, the first of which is already in an advanced stage of construction. Furthermore, a new urea plant, licensed and designed by Casale, has recently come on stream in India.
RUSSIA Topaz selects Casale for new urea plant
CF Industries Holdings, Inc. and the J. R. Simplot Company have entered
into an agreement that allows CF to ship, store, and distribute anhydrous ammonia from Simplot’s Rivergate Terminal in Portland, Oregon, starting in 2019.
The arrangement will enable CF to meet growing demand for anhydrous ammonia in Pacific Rim countries, a region that imported over 4.1 million t of the product in 2017. CF intends to supply the ammonia from its Medicine Hat, Alberta nitrogen complex, which has among the lowest production costs in the company’s manufacturing network. Additionally, CF anticipates selling to local customers from the terminal.
Simplot’s Rivergate Terminal is the largest deep water ammonia terminal on the US West Coast, and has two 25 000 t ammonia storage tanks on site. The terminal is located on the Willamette River in Portland, Oregon, approximately 2.5 miles upstream from its confluence with the Columbia River.
“We are delighted to partner with our customer, J. R. Simplot Company
at Rivergate, to further expand CF’s best-in-class ammonia distribution capabilities and leverage our Medicine Hat complex’s low cost production and logistics advantages,” said Bert Frost, Senior Vice President, Sales, Market Development and Supply Chain, CF Industries. “Through this state-of-the-art, multi-mode point of sale, we will increase our ability to serve customers on the Pacific Rim, a region whose consumption is growing and imports account for over 25% of global seaborne ammonia trade.”
“We are excited about this opportunity to partner with CF Industries to leverage available capacity at our Rivergate terminal, a key asset in our supply chain,” said Doug Stone, President of Simplot’s AgriBusiness Group. “With the commissioning of the anhydrous ammonia plant at our Rock Springs, Wyoming facility, the opportunity to provide available storage and warehousing of ammonia became a mutually beneficial arrangement with one of our long time partners, CF Industries.”
US CF Industries and The J. R. Simplot Company announce agreement
WORLD NEWS
8 | WORLD FERTILIZER | NOVEMBER/DECEMBER 2018
DIARY DATES
Fertilizer Latino Americano 201928 – 30 January 2019Mexico City, Mexicowww.events.crugroup.com/fertilizerlatinoamericano/home
69th Annual Laurance Reid Gas Conditioning Conference25 February 2019 - 28 February 2019Oklahoma, USwww.pacs.ou.edu/lrgcc/
Nitrogen + Syngas 201904 – 07 March 2019Berlin, Germanyhttps://events.crugroup.com/nitrogenandsyngas/home
Phosphates 201925 – 27 March 2019Florida, UShttps://events.crugroup.com/phosphates/home
42nd International Phosphate Fertilizer & Sulfuric Acid Technology Conference8 –9 June 2019Florida, USwww.kemworks.com/event/42nd-international-phosphate-fertilizer-sulfuric-acid-technology-conference-clearwater-beach-fl orida-usa
87th IFA Annual Conference11-13 June 2019Montreal, Canadawww.fertilizer.org/Public/Events/Upcoming_IFA_Events/Member/IFA_Events/Upcoming_Events.aspx
TechnipFMC has announced the completion of the construction of a new
ammonia production unit named “Ammonia 4”, executed for Duslo a.s, part of the Agrofert group.
The plant successfully passed performance tests in July. This new unit operates in the existing fertilizer complex located in Sal’a, in the Slovak Republic.
TechnipFMC’s scope included the engineering, procurement, and construction (EPC) of this new ammonia unit. The contract awarded in 2014 and was executed by the company’s operational centre in Rome, Italy.
The new Ammonia 4 unit is based on Haldor Topsoe’s last generation technology. It has a capacity of 1600 tpd of ammonia with
an estimated operating life of 40 years. It incorporates the most advanced engineering and technological solutions for minimum energy consumption and reduction of pollutants emissions.
With the timely completion of the Ammonia 4 plant, Duslo a.s has become one of Europe’s top ammonia producers in terms of energy efficiency and volume of emissions.
Marco Villa, President EMIA, commented: “This milestone confirms TechnipFMC’s long-lasting relationship with Haldor Topsoe, the global market leader in ammonia technology and catalysts. The completion of this new generation unit also reflects TechnipFMC’s leadership in the chemical, refining, and petrochemical sectors”.
SLOVAKIA New ammonia plant comissioned
EuroChem Group AG, a leading global fertilizer producer, announces the formal
opening of a new production plant for highly effi cient, water-soluble fertilizers at its Lifosa subsidiary in Lithuania.
The e14 million (US$16 million) facility will produce 25 000 tpy of crystalline urea phosphate, adding to the range of high-quality fertilizers currently manufactured at Lifosa. These include diammonium phosphate (DAP), a nitrogen-phosphorus fertilizer, and water-soluble crystal monoammonium phosphate (MAP).
Crystalline urea phosphate is a soluble, chlorine-free fertilizer that contains no heavy metals and is suitable for use on various soils.
As it is soluble in water it can easily be applied by a sprinkler and provides plants with the necessary nitrogen and phosphorous nutrients needed for growth.
“This new facility will further strengthen Lifosa’s position in the global fertilizer market,” said Jonas Dastikas, General Manager of AB Lifosa. “At the same time, the construction of the plant is an investment in the sustainable development of the company. We constantly aim to protect our environment by rationing the use of natural resources.”
Test production of crystalline urea phosphate began in September, and the plant will ramp up to full production by the end of the year.
LITHUANIA EuroChem opens new US$16 million fertilizer plant
GLOBAL New solvent to decrease sulfur emissions
ExxonMobil Catalysts and Licensing LLC and BASF Corporation are conducting a
full scale commercial demonstration of a new gas treating solvent at Imperial Oil’s Sarnia Refi nery.
The companies jointly developed the new amine-based solvent aimed at meeting stringent sulfur emissions standards with greater efficiency, further raising the bar for tail gas treating and acid gas removal processes.
The innovative technology improves the selective removal of hydrogen sulfide (H
2S)
and minimises the co-absorption of carbon dioxide (CO
2) from gas streams. The highly
selective properties of the solvent allow refiners and gas processors to increase capacity and lower operating costs in existing equipment. For new treating facilities, the usage of the technology will reduce the size of the equipment and the initial capital investments.
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11
Priyanka Khemka, Nexant, details the consumption and capacity developments of nitrogen fertilizers in Asia.
A sia Pacifi c is the most important region for fertilizer consumption, accounting for over 60% of global demand for nitrogen fertilizers due to the large population and suitability of urea for the climate in the region. Demand growth in Asia
Pacifi c is mainly driven by demand growth in China and India, the two most populous countries in the region.
Consumption in AsiaChina is the largest urea consuming country in the world, with one third of total global urea production consumed in the People’s Republic. Demand for urea is estimated to have been 58 million t in 2017, down from 60 million t in 2013. This decrease was partly the result of a more modest application rate as compared to the over-application in previous years, driven by China’s zero fertilizer consumption policy. About 60% of urea in China is consumed in cereal and oilseeds such as corn, soya bean, and rapeseed production. Industrial applications are the second largest urea consumption sector in China, including melamine, urea-formaldehyde resins (UF), and adhesives, and other industrial uses. The industrial market has been growing along with rapid development of the construction industry,
12 | WORLD FERTILIZER | NOVEMBER/DECEMBER 2018
urbanisation, and rising incomes. However, growth is easing with a general slow down in the economy. Ammonium bicarbonate and ammonium chloride are still applied in China due to their on-going availability and usage by farmers. DEF/Adblue is yet a small but fast growing application for urea in China, mainly used in diesel engines to reduce emission of oxynitride.
After China and the US, India is the third largest ammonia consumer in the world, with an estimated demand of about 32 million t in 2017. With little consumption in industrial applications or biofuel fertilizer, 99% of urea in the country is used for direct application for growing food crops. Paddy rice and wheat are the most important crops in terms of nitrogen fertilizer consumption in India. Farmers in India tend to heavily favour urea, as it is cheaper and highly subsidised compared to phosphorous and potassium fertilizers. Indeed, this has resulted in the overuse of urea, which in turn has adversely affected soil quality and crop yield in many regions. To address the environmental implications of urea overuse, and prevent the diversion of urea to the industrial sector, the government has mandated that at least 75% of the nation’s urea production be coated with neem. Concerns over the effect of the over
application of fertilizers and its environmental implications is slowing down future urea consumption in India.
Demand for urea in the rest of Asia Pacifi c, however, has also grown considerably in recent years. Demand in Asia Pacifi c (excluding China and India) increased from 20.3 million t in 2000 to an estimated 28 million t in 2017. Indonesia and Vietnam are amongst the largest consumers of urea in Other Asia. Consumption growth is mainly driven by urea demand as a direct application fertilizer, which makes up more than 90% of the total urea consumption. Urea consumption for biofuels production accounts for only around 1% of the region’s total urea consumption, but makes up a substantial share of the total urea consumed for biofuels production in some South East Asian countries. Thailand, for example has a signifi cant bioethanol and biodiesel industry, with ambitious growth plans. Industrial applications account for the remaining urea demand.
Indonesia is the third largest nitrogen fertilizer consuming country in Asia Pacifi c (after China and India), accounting for about 5% of the regional total. In 2017, consumption is estimated to be around 18 million t, with the vast majority (over 80%) used in the synthesis of urea.
Capacity developments in AsiaChina alone accounted for over 40%, about 89 million t, of the global capacity for urea in 2017. The ammonia and urea industry is under supply pressure. Due to ongoing environmental restrictions in China’s coal sector, consumers are switching to less polluting gas-based heating methods. This has naturally impacted the operations of gas-based ammonia and downstream producers in the country, as more gas volumes continued to be preferentially directed to the heating industry. The urea industry has suffered strict environmental supervision, with small and uncompetitive plants closing down. The urea industry has suffered strict environmental supervision, with small and uncompetitive plants closing down. Domestic production for urea is below 50% of the operating capacity. The cutback is a combination of plant shutdowns, due to pollution control requirements, and a reduction in output to help maintain prices.
In India, more than a dozen ammonia/urea projects, based on gas as well as coal, are under consideration. However, only 3 to 4 projects are expected to materialise in the next 5 years. Gas supply issues, as well as the huge backlog of government
subsidies, may deter private sector company investment in the fertilizer sector. Chambal Fertilizers and Chemicals is building a 790 000 tpy ammonia plant and a 1.44 million tpy urea plant, which are expected to begin operation by 2019. New ammonia urea units are being built in Barauni, Bihar, Sindri, and Jharkhand, and expected to come onsteam in 2021.
Asia Pacifi c (excluding China and India) accounts for about 11 – 12% of the global capacity for urea, i.e. about 29 million t of urea in 2018. Indonesia, accounting for about 30% of the capacity in the region, is the largest urea producer in Asia Pacifi c. Recent Figure 2. Urea supply demand trade – Asia Pacific.
Figure 1. Urea demand by end use – Asia Pacific (2017 estimate, demand = 120 million t).
NOVEMBER/DECEMBER 2018 | WORLD FERTILIZER | 13
additions in the region have been a result of Pupuk Kaltim starting up new urea facilities, with a capacity of 1.1 million t in 2015 and Pupuk Sriwidjaja starting up a 900 000 tpy urea unit in 2016. Taiwanese investors are exploring investment opportunities for two ammonia plants in Indonesia. The fi rst ammonia plant is expected to have a production capacity of about 600 000 tpy and the other plant is expected to have a production capacity of about 1.8 million tpy. However, Nexant considers these announcements as speculative, as fi nancial closure has not yet been reached.
Pakistan and Bangladesh are the next largest producers of urea, with a capacity of 8.2 million tpy and 3.1 million tpy, respectively, in 2018. Shahjalal Fertilizer Company and Urea Fertilizer Factory started operations of their 630 000 tpy urea units in Fenchuganj, Bangladesh in 2015.
Malaysia now accounts for 2.6 million t of urea capacity, with the start-up of Petronas’ 1.1 million tpy urea plant in Sipitang. Malaysia’s Sabah Oil and Gas Development Corporation and a Chinese consortium have signed a memorandum of understanding for a feasibility study into a new ammonia/urea plant at the Sipitang Oil and Gas Industrial park in Sabah, east of Brunei. The consortium consists of the China National Complete Plant Import and Export Corporation, Sichuan Chemical Industry Holding, and China Chengda Engineering. However, Nexant still considers these projects as speculative as a fi nal investment decision has not yet been reached.
Brunei Fertilizer Industries awarded the EPC contract to thyssenkrupp for a new greenfi eld fertilizer project, including a 726 000 tpy ammonia plant, and a 1.3 million tpy urea unit in Sangali district, Brunei. Construction began in August 2018, and the project is expected to come onstream in 2021.
Vietnam’s Habac Nitrogen Fertilizer Chemicals debottlenecked its urea plant from a capacity of 180 000 tpy to 500 000 tpy in 2015. Some Asian companies are looking overseas for investments, particularly in low gas countries. Fatima Group of Pakistan is the principal developer and sponsor of the Midwest Fertilizer project in the US.
The main projects under construction in the region are limited to Indonesia, Malaysia, and Australia. In 2015, Pupuk Kaltim started a new 850 000 tpy ammonia plant in Kalimantan, Indonesia. PAU has also started construction of a 700 000 tpy ammonia plant in Banggai Regency, Indonesia, scheduled to come onstream by 2018.
Hu-Chems Fine Chemicals has started the construction of a new facility for the production of ammonia, nitric acid, and ammonium nitrate in Bintulu, Malaysia. The facility is proposed to have a capacity of 400 000 tpy of nitric acid, 200 000 tpy of ammonium nitrate, and 600 000 tpy of ammonia, and expected to come onsteam in 2019.
In Australia, Perdaman Chemicals and Fertilizer is considering building a coal based integrated ammonia/urea complex in Collie. However, the project is on hold due to a legal dispute with the coal supplier. It is unlikely that the project will proceed. In early 2018, Perdmann announced plans to build a gas based ammonia urea complex in the Burrup Peninsula. Woodside Petroleum has agreed to supply gas for the project. Nexant still considers the project as speculative.
ConclusionChina has become the largest exporter of urea in the world after the changes in the export taxes. Traditionally, the country’s government regulated the urea market by imposing import and export taxes. Especially high export taxes in past years have led to a restriction in urea exports, especially when international fertilizer prices are high, to ensure that domestic urea requirements are met. In recent years however, the government has lowered general export taxes considerably, which has led to a signifi cant increase in China’s net exporting position. Since 2015, the government has decreased the export regulations even further, leading to further increases of available export capacity. In 2016, the urea export tax had been fl at at a rate of CNY80/t (US$11/t). The export taxes for urea were abolished in January 2017. China’s operating rates have strengthened considerably due to a general consolidation of the industry through closures of old, ineffi cient plants.
The operating rates for Chinese urea production averaged around 70%. Coal-based producers are facing higher coal costs, forcing either shut down or build-up of inventory for future sales (at higher prices). Even the more effi cient plants are facing diffi culty operating at full capacity because of the high cost of inputs and electricity. The government’s continued focus on controlling pollution has forced a number of older coal based plants to shut down. If the government does not ease up on the pollution standards in 2019, urea production may remain low in the forecast period, resulting in lower export volumes of urea.
India is a signifi cant net importer of urea. China and Iran are the major suppliers of urea to India. One third of the 5.5 million t import requirement was met from Iran in 2017. In compliance with the sanctions passed by the US in mid 2018, India has decided to stop the purchase of urea from Iran. This is expected to force domestic producers to operate at above 100% capacity in the near term until alternative import sources are established. There are also speculations that Iran may start exporting urea to China, which will ultimately be re-exported to other countries, such as India. Overall, India’s dependency on imports is expected to grow in future years, as capacity additions will not be able to keep pace with the local demand growth.
Asia Pacifi c (excluding China and India) is a net importer of urea. Given the rapidly growing demand in the region, imports are expected to grow in the coming years. These imports are likely to come from the Middle East, China, and some parts of Africa, where there is a growing interest in monetising large gas reserves. Some capacity additions could be expected in new stranded gas areas, such as Myanmar, but due to political and economic uncertainties, it is not clear if and when such additions will take place.
There is a considerable amount of intra-regional trade within the Asia Pacifi c region. Indonesia, with its large natural gas reserves, is the major ammonia and urea exporting country in Asia Pacifi c. The largest consumers of urea in this region are Thailand, Australia, Vietnam, Philippines, and South Korea. Furthermore, Indonesia faces growing domestic gas price pressure due to increased LNG exports, which competes with gas supplies to the fertilizer industries. However, India and Malaysia will remain the major exporters in the coming years in the Asia Pacifi c region.
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