ADNOC, OCP Intend to Develop Global World-Class Fertilizers Joint Venture
The Abu Dhabi National Oil Company (ADNOC) and OCP Group of Morocco (OCP) have agreed to explore the creation of a new global fertilizers joint venture, in a move that will accelerate the execution of both ADNOC and OCP's international strategies.
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, said on Tuesday the two companies in a joint statement.
The ADNOC and OCP will work on developing capabilities that will support this venture. The proposed joint venture will build on both 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, said the same source.
The proposed partnership will comprise two fertilizer production hubs, one in the UAE and one in Morocco (utilizing both existing and new assets), giving the proposed joint venture global market reach.
This partnership, announced on the sidelines of ADNOC's "Downstream investment forum" held in Abu Dhabi on May 13-14, is in line with ADNOC’s announced plans to increase production by at least 50% from its current levels of 7 million tons a year, as it looks to increase gas production by tapping into vast gas caps and scaling up sour gas production.
As for OCP, it has engaged in a large-scale development program that will enable it to capture its fair share of growing demand for fertilizers. The first phase of this program was completed this year and has brought the Group’s existing fertilizer capacity to 12 million tons, and rock export capacity to over 18 million tons, the statement added.
Commenting on the agreement, Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO said that the proposed joint venture with OCP Group illustrates ADNOC's intent "to maximize 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."
Mostafa Terrab, OCP Group Chairman and CEO, said that this collaboration between the companies brings together the world's largest phosphate reserves and the world’s largest sulphur production capacity and represents an unprecedented alliance in the industry, providing the partners with a world-class integrated asset base and complementary geographic locations.
MAP 15 May 2018