Nov 12, 2007
A letter of intent between Qafco and a consortium of the Italian company Snamprogetti and the Korean company Hyundai has been signed for the construction of the Qafco-5 expansion project. Yara International ASA owns 25% of Qafco, the remaining 75% is owned by Industries Qatar.
The Qafco-5 project includes the construction of two ammonia plants, with a total daily production capacity of 4,600 tons, and a urea plant with a total daily production capacity of 3,850 tons. The project also includes upgrades of already existing facilities and infrastructure that will facilitate future expansion.
Upon completion of the Qafco-5 project, Qafco's total annual production capacity will increase to around 3.8 million tons of ammonia and 4.3 million tons of urea. The project will deliver a 73% increase in ammonia capacity and a 43% increase in urea capacity. As a result of the expansion, Qafco will become the world's largest single site producer of ammonia and it will retain its status as the largest single site producer of urea.
"Qafco is a long standing and successful partnership, and the expansion will further strengthen Yara's production base with competitive gas sourcing. The investment cost has increased substantially compared with previous expansions, reflecting a general cost increase for petrochemical plant projects. However, long-term fertilizer prices will need to reflect the higher construction cost levels to motivate new supply in a tight and growing global fertilizer market. Qafco's scale and competitive gas sourcing combined with Yara's global marketing network forms a strong foundation for profitable expansion," says President and CEO of Yara International, Thorleif Enger.
Construction work on Qafco-5 is set to commence in January 2008, after the signing of the project construction agreement. The construction work is scheduled to take approximately 40 months with the completion around the end of first quarter 2011.
The project will be partially financed with bank loans, with the balance coming from Qafco's existing reserves and cash flows from its operations.
Torgeir Kvidal, Investor Relations
Telephone (+47) 24 15 72 95
Cellular (+47) 91 339 832
Hamed Brodersen, Media Relations
Cellular (+47) 40 468 110
Yara International ASA is a leading chemical company that converts energy and nitrogen from the air into essential products for farmers and industrial customers. As the number one global supplier of mineral fertilizers and agronomic solutions, we help provide food for a growing world population. Our industrial product portfolio includes environmental protection agents that safeguard air and water purity and preserve food quality. Yara's global workforce of 7000 employees represents great diversity and talent enabling Yara to remain a leading performer in its industry.www.yara.com