Pakistani fertilizer importer and producer Fauji Fertilizer (FFC) is planning to build a new DAP plant in Pakistan. The plant would have a capacity of 1mn t/yr of DAP and take up production from around 2024, Fauji said.
But the project is currently in the initial stages and depends on whether the producer receives natural gas to produce the fertilizer at lower, government-approved rates.
Pakistan's government operates a scheme to encourage new fertilizer plants, under which fertilizer producers can receive natural gas at lower rates for 10 years. Current beneficiaries of the reduced gas prices include fertilizer producer Fatima, among others. Natural gas is used to produce ammonia, which is the nitrogen component in DAP fertilizer.
Fauji has requested to receive the concessionary rates for a gas volume of 30mn ft³/d from Pakistan's energy ministry, which has forwarded the proposal to the Economic Co-ordination Committee. Fauji expects a decision within the next few months.
FFC operates Pakistan's only DAP plant, Bin Qasim, which produces roughly 800,000 t/yr of DAP. FFC sources phosphoric acid for the plant from a joint venture with Moroccan fertilizer producer OCP, which is based at Jorf Lasfar in Morocco. FFC is planning to source phosphoric acid for its new plant through imports as well.
The additional DAP plant could potentially increase Fauji's total DAP production to around 1.8mn t/yr of DAP, or more than 80pc of Pakistan's domestic demand in 2020, and could reduce the country's import requirement to less than 400,000 t/yr — compared with imports of 1.3mn t and 1.1mn t in 2019 and 2020, respectively.
