UAE: Fertilizer Project Adnoc and OCP Plan to Create World-Class Fertilizer Joint Venture
Both the companies intend to extend their partnership and develop two fertilizer production hubs in the UAE and Morocco respectively.
Abu Dhabi/UAE – The Abu Dhabi National Oil Company (Adnoc) and OCP Group of Morocco (OCP) have agreed to explore the phased creation of a new global fertilizer joint venture, in a move that will accelerate the execution of both Adnoc and OCP’s international strategies.
The proposed joint venture will build on both the companies’ competitive advantages, namely Adnoc’s world-scale sulphur production, ammonia and gas expertise, and shipping and logistics network, and OCP’s access to large phosphate resources, its century-long fertilizers know-how and its marketing network, to develop a new global fertilizer producer. The proposed partnership will comprise two fertilizer production hubs, one in the UAE and one in Morocco (utilising both existing and new assets), giving the proposed joint venture global market reach.
This proposed project extends the partnership already established through the existing long-term sulphur offtake agreement that was announced by the two firms in December 2017. The two companies will work on developing capabilities that will support this venture, as they expand their partnership, leveraging their respective strengths and building their human capital.
The agreement aligns with Adnoc’s announced plans to increase production by at least 50 % from its current levels of 7 million tonnes a year, as it looks to increase gas production by tapping into vast gas caps and scaling up sour gas production. OCP has engaged in a large-scale development programme that will enable it to capture its fair share of growing demand for fertilizers. The first phase of this programme was completed this year and has brought the Group’s existing fertilizer capacity to 12 million tonnes, and rock export capacity to over 18 million tonnes.
The agreement comes as Adnoc, at its Downstream Investment Forum, unveils its ambition and plans to become a global downstream leader, enabling it to further stretch the value of every barrel it produces to the benefit of the company, its partners and the UAE. It aligns with the firm’s 2030 strategy of a more profitable upstream, more valuable downstream, more sustainable and economic gas supply, and more proactive, adaptive marketing and trading. This project further supports Adnoc’s downstream growth plans to create the world’s largest integrated refining and petrochemicals complex in Ruwais.