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PhosAgro May Consider Construction of Mineral Fertilizers Production Facility in the Murmansk Region after 2017 if Natural Gas Supply is Provided

22 May 2014
St. Petersburg – Today at the St. Petersburg International Economic Forum, Acting Governor of the Murmansk Region Marina Kovtun and PhosAgro (“the Company”) CEO Andrey Guryev discussed social and economic development issues affecting the Murmansk Region, as well as the implementation of on-going and potential investment projects that are top priorities for the Region’s economy and for PhosAgro.

At the meeting, it was noted that one of the factors holding back the development of new production facilities in the Murmansk Region is the lack of industrial gas supplies on the Kola Peninsula.  Initially, it was expected that this deficit would be addressed by the launch of the Shtokman gas condensate field.  

There is now a new project that could help to resolve the gas deficit in the Murmansk Region.  Acting Governor Marina Kovtun’s initiative to build a gas pipeline in the Murmansk Region, and the allocation of gas volumes, will be discussed with Gazprom.  In connection with this, PhosAgro may return to consideration of a project to construct a mineral fertilizer production line at its subsidiary Apatit.  This project could include construction of an energy-efficient ammonia production line and production of mineral fertilizers.  The project is interesting because it would integrate at one site the production of high quality phosphate rock with its processing into mineral fertilizers, as well as because of its proximity to the Murmansk port, all of which provide synergetic effects.  PhosAgro’s natural gas needs (including Apatit’s current consumption), if such a project were implemented, are estimated at around 1.2 billion cubic metres per year.

The commissioning of such a new complex could provide around 700 new high tech jobs, and significantly increase the Company’s tax payments to local, regional and federal budgets.

PhosAgro CEO Andrey Guryev thanked Governor Marina Kovtun for her support of the Company’s social and investment projects, which are clearly defined in the unified strategy for social and economic development of the Region, and are designed to strengthen its industrial potential, improving quality of life for employees and for residents of the Region.

Andrey Guryev also underscored that the Company supports Acting Governor Marina Kovtun’s initiatives aimed at resolving the issue of gas supply, and it highly values her efforts to improve the socio-economic development of the Region.