4 Oct 2010 15:36

PhosAgro to use Shtokman gas to make fertilizer in Murmansk region

MURMANSK. Oct 4 (Interfax) - Fertilizer maker PhosAgro plans to build a fertilizer plant in Murmansk region supplied with gas from the Shtokman field, General Director Alexei Grigoryev said at the Arctic forum in Murmansk on Saturday.

The project involves creation of an industrial cluster, from extraction of ore to processing into compound fertilizers. The complex will have capacity to process 1 million tonnes of apatite and 500,000 tonnes of nepheline concentrate a year without having to ship intermediate product for processing at facilities outside Murmansk region.

The project will see organization of high value-added processing of gas, which will be used both as feedstock and fuel. "Based on the roughest approximations, if the new cluster receives 1 billion cubic meters of gas a year, it will be able to produce roughly 2.5 million tonnes of agrochemical output, alumina, soda and potash," Grigoryev said, adding that it will take about four years to build the complex.

He did not specify project costs, but an industry insider estimated the cost at 55 billion-70 billion rubles.

PhosAgro will invest 13 billion rubles this year, of which about 40% will go to develop Apatit .

A source familiar with the company's plans told Interfax that PhosAgro would invest 10 billion-12 billion rubles next year. The money will be used to continue construction of a carbamide production line and a gas turbine for electricity production at the facility in Cherepovets.

In addition, Ammophos will continue its development of railway facilities in order to boost capacity to produce fertilizer and concentrate. It will also continue rebuilding slurry reservoirs.

Construction of capacity at the Kirovsky and Rasvumchorrsky mines, including equipment replacement, will continue. The comprehensive program to modernize electricity facilities in order to reduce energy consumption will continue.

PhosAgro mines phosphate ore and produces mineral fertilizer. It includes Ammophos, Cherepovetsky Azot (Vologda region), Balakovskyie Minudobreniya (Saratov region) and Apatit (Murmansk region). The state owns 20% of shares.