This move will reportedly accelerate the execution of both companies’ international strategies. It will build on both of their competitive advantages to develop a new global fertilizer producer. ADNOC will provide world scale sulfur production, ammonia and gas expertise, as well as its shipping and logistics network, whilst OCP will provide access to large phosphate resources, as well as know-how regarding fertilizers and its marketing network. The proposed partnership will consist of two fertilizer production hubs – one in the UAE and one in Morocco (making use of both existing and new assets), ensuring that the proposed JV has a global market reach.
According to the statement, the proposed project extends the partnership that has already been established through the existing long-term sulfur offtake agreement that was announced by the two firms in December last year. Both 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 (currently at 7 million tpy) by a minimum of 50%, as the company aims to increase gas production by tapping into vast gas caps and scaling up sour gas production. OCP has engaged in a large scale development program that will allow it to capture a share of growing fertilizer demand. The first phase of the program was completed this year, and has brought the group’s existing fertilizer capacity to 12 million t and rock export capacity to more than 18 million t.
H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, said: “The proposed joint venture with OCP Group illustrates ADNOC’s intent to maximise the value of all our resources, as we grow our downstream business, diversify our product range and increase revenues. The agreement builds on the expanded partnership model we announced last year, as we open our entire value chain to reliable, value-adding, long-term partners, who can complement our capabilities and resources, and enhance our market access.
“Importantly, this agreement is aligned with the directives of our leadership to further build on the existing close relationship and ties between the United Arab Emirates and Morocco, and we look forward to building on these firm foundations as we work towards potentially building a new global fertilizers champion.”
Mostafa Terrab, OCP Group Chairman and CEO, added: “This collaboration between our companies brings together the world’s largest phosphate reserves and the world’s largest sulfur production capacity and it represents an unprecedented alliance in the industry, providing the partners with a world-class integrated asset base and complementary geographic locations. We view this new partnership as a unique opportunity, in line with our global strategy, that will contribute to our ability to serve growing demand for fertilizers worldwide.”
According to the statement, this agreement comes as ADNOC – at its Downstream Investment Forum – reveals its aim to establish itself as a global downstream leader, allowing it to further stretch the value of each barrel it produces to the benefit of ADNOC, its partners and the UAE. It aligns with its 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.
Read the article online at: https://www.worldfertilizer.com/nitrogen/15052018/adnoc-and-ocp-intend-to-develop-new-fertilizer-jv/