Gulf to become major fertiliser producer

The UAE and other Gulf states are expected to pump billions of dollars in the next few years into expanding their fertilisers industry to face an upswing in global demand as a result of agricultural expansion, according to an official study.

The six Gulf Co-operation Council (GCC) states, which control more than 40 per cent of the world’s oil and a fifth of global gas wealth, are already among the largest fertiliser producers and the new projects will strengthen their position in the industry, said the study by the Doha-based Gulf Organisation for Industrial Consulting (GOIC), which advises on GCC manufacturing policies.

“There are indications that the world’s demand for fertilisers will grow fast in the next period as many countries are expanding and upgrading their agricultural sector and increasing their farm exports,” said the study.

“The expected growth in the GCC’s fertiliser production as a result of investments in new projects and expansion of existing facilities will turn member states into major fertiliser production and export centre in the next few years… this will allow them to meet the global demand, strengthen their competitive position and penetrate new markets,” the report said.

According to the report, the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman are planning to expand their ammonia and urea production facilities and construct new projects within ongoing expansion programmes in their fertiliser and oil and gas industries.

A breakdown showed the UAE’s Ruwais Fertilisers Industries Company has plans to expand ammonia output to 1.25 million tonnes and urea to 1.3 million tonnes by year 2010.

In Saudi Arabia, the world’s dominant oil power, around $3.5bn will be invested by Maaden and the Saudi Arabia Basic Industries Co (Sabic) to build a massive complex for the production of three million tonnes of sulphuric acid and other substances by 2010. Another Sabic affiliate, Safco, plans a 2.5 million tonne ammonia and urea plant.

Qatar, which has the world’s largest gas resources, is planning to build a new complex to produce 1.1 million tonnes of ammonia and one million tonnes of urea, while there are similar plans in Bahrain and Kuwait.

GOIC figures showed the combined capital invested by the GCC states in fertilisers until the end of 2006 totalled around $5.7bn.

Saudi Arabia accounted for around half, pumping in $2.52bn.

Investments stood at $1.3bn in Kuwait, around $1bn in Qatar, $412 million in Bahrain, $382m in the UAE and the rest in Oman.

Their combined production of ammonia totalled 7.22 million tonnes in 2007 against a designed capacity of 7.8 million tonnes. Urea output was estimated at nearly 9.9 million tonnes against a designed capacity of 10.4 million tonnes.