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PhosAgro Launches new Urea Production and Electricity Generation Capacities

26 October 2012

Cherepovets – PhosAgro ("PhosAgro" or "the Company") (MICEX-RTS, LSE: PHOR), a leading global vertically integrated phosphate-based fertilizer producer, announces that Russian Federation Prime Minister Dmitry Medvedev, during his visit to the Vologda Region, participated in a ceremony to mark the official launch of operations of PhosAgro’s new urea production complex and a gas turbine electricity station in Cherepovets. 

Deputy Prime Minister Arkady Dvorkovich, Presidential Plenipotentiary  Envoy to the Northwest Federal District Nikolai Vinnichenko,Vologda Region Governor Oleg Kuvshinnikov, Russian Union of Chemists Vice President and Federation Council Member Andrey Guryev, Deputy Head of the Industry Department of the RF Government Igor Malyshev and PhosAgro CEO Maxim Volkov attended the ceremony.

This is the first full-cycle urea line constructed in recent Russian history.   The construction of the production and generation complex, which combines 500 kt p.a. of urea capacity with a 32 MWt gas turbine electricity plant, is one of PhosAgro’s key projects in its long term modernisation strategy.

The integrated urea production and power generation complex was built in record time using leading-edge technologies, and it is a pioneer in the Russia mineral fertilisers industry, setting the example for others in terms of industrial energy efficiency.

The urea complex is unique not only because of the short construction time – the best available technologies and modern materials were utilized to build the production units and supporting facilities. This makes the complex the etalon of energy efficiency, resource use, environmental safety and productivity.

Based on expected energy use (heat and electricity), excluding electricity generation, expert estimates show that the new urea production facility will be 12% more efficient than other urea lines currently operating in Russia.

The new complex is expected to enable production of approximately five thousand tonnes of urea per employee per year.

With the launch of the new electricity station, PhosAgro’s Cherepovets facilities will now have a total generation capacity of 134 MWt.  Integration of the urea production and electricity generation facilities will enable the Company to reduce per unit energy costs by several times.

Total capital expenditure on construction of the new urea plant and electricity station was approximately RUB 7.6 bln. Leading Russian design bureaux were engaged to design the production complex and substation. Construction work was carried out by Russian contractors.

Total production of mineral fertilisers at PhosAgro’s Cherepovets site following the launch of the new urea complex will exceed 4 million tonnes.

More than 1,000 workers were involved in the project. One hundred fifty three jobs for highly-qualified workers have been created in urea production and at the gas-turbine station.

In addition to increasing urea output, which is in demand around the world, and expected increase in tax payments to the regional budget, infrastructure development and related sectors in the region have also been boosted, along with residential accommodation for employees of PhosAgro Cherepovets.

The project has great environmental significance. The new urea production will minimise the effect of carbon dioxide on the environment. Carbon dioxide will be used as a raw material in urea production, which is extremely important for the environment of Cherepovets, an industrial city.

To support training for staff to work at this high-tech facility and other subsidiaries of PhosAgro-Cherepovets, PhosAgro and the Vologda Region government have supported the establishment of a Chemical-Technical College and a Faculty of Inorganic Substances and Fertilisers Technology at Cherepovets State University.