Uhde to Build Agrium's $1.2 Billion Nitrogen Plant in Egypt

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Researched by Industrial Info Resources (Sugar Land, Texas). Uhde (Essen, Germany) will design and build a world scale nitrogen facility for Agrium (NYSE:AGU) (Calgary, Alberta) at Damietta in Egypt. The construction cost of the facility and related infrastructure is estimated to be $1.2 billion.

The plant will consist of two ammonia and urea trains with a combined annual capacity of 1.3 million tons of urea and 100 tons of net ammonia. Agrium will have a 60% stake in the EAgrium joint venture. Egypt’s state owned EChem and EGASD will hold 24% and GASCO the state’s national operator of the gas distribution grid will hold a 9% interest. The Arab Petroleum Investment Corporation (APICORP) will hold the balance of 7%. Agrium will be the exclusive marketer of nitrogen products exported from the facility.

Mike Wilson, Agrium President and CEO, said, “This is an outstanding opportunity for Agrium to construct and operate a facility in an area with long-term, competitively priced gas , prime access to world markets, and an efficient , well educated workforce. Our project co-owners bring local business knowledge, energy supply and distribution expertise, which combined with our expertise in marketing operations, positions this project very well. We expect to have one of the lowest operating costs in the world.”

The lump sum, turnkey project is scheduled to begin this month and the first train is set for completion in the first half of 2010 with the second following by the end of 2010. The project is conditional on a lender finance commitment. The majority of the project will probably be through non-recourse debt, with the remainder funded by equity contributions from the co-owners.

Agrium currently has thirteen production plants around the world producing 8 million tons of nitrogen, potash, phosphates, controlled release fertilizers and micronutrients. The company employs 6,000 people and in 2006 had revenues of $4.2 billion. It claims to be the premier supplier of specialty fertilizers in North America through its Advanced Technologies business and a major global wholesale producer and marketer of all three major agricultural nutrients.

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