QatarEnergy to double urea production amid growing demand

The new facilities will make the country 'the world’s largest' urea producer and boost total exports

Qatar's Energy Minister and chief executive of QatarEnergy Saad Al Kaabi said the country will become the world's largest exporter of urea fertiliser by the end of the decade. AFP

QatarEnergy will build a urea production complex that will more than double Qatar’s output of the key agricultural fertiliser, as the world's increasing population drives higher demand for food.

The project includes building three ammonia production lines that will supply feedstock to four new urea production trains in Mesaieed Industrial City, which is about 40km south of Doha.

The new facilities will boost the Gulf country’s urea production to 12.4 million tonnes per annum from about 6 million currently, QatarEnergy said in a statement on Sunday.

Production from the project’s first new urea train is expected before the end of the decade, the state-run energy company said.

The "mega project ... will make the state of Qatar the world’s largest urea producer, playing a crucial role in ensuring food security for hundreds of millions of people”, said Saad Al Kaabi, chief executive of QatarEnergy and Qatar’s Minister of State for Energy Affairs.

“Developing this project in Mesaieed Industrial City will ensure the optimum utilisation of the excellent existing infrastructure for the petrochemical and fertiliser industries, including the city’s export port, which is one of the largest fertiliser and petrochemical export facilities in the Mena region. It will also establish Mesaieed as the urea production capital of the world.”

Gulf fertiliser producers have been boosting output and seeking new markets after saturating the regional sector.

Qatar Fertiliser Company (Qafco) is one of the largest integrated single-site producers of ammonia and urea, with a current production capacity of about 4 million tonnes per annum of ammonia and 6 million tonnes per annum of urea.

In 2022, QatarEnergy Renewable Solutions and Qafco joined forces to build the Ammonia-7 Project, which will have a capacity to produce 1.2 million tonnes per annum of blue ammonia. It is expected to start production in the first quarter of 2026.

Fertiliser prices have been falling since late 2022, partly on softening demand and a decline in energy prices following Russia’s invasion of Ukraine.

Urea is the most widely used nitrogen fertiliser in the world, accounting for about 60 per cent of global demand.

A farm worker sprays fertiliser at a paddy field in Sungai Besar, Malaysia. EPA

However, the market for urea has become tighter this year, thanks to lower exports from China, the world’s largest producer of nitrogen and phosphorus.

The Asian country, the world’s second-largest economy, has imposed limits on the export of urea to meet surging domestic demand.

Last month, the UAE’s Fertiglobe said it expected to benefit from the absence of Chinese urea supplies.

“Typically, they could do three to four million tonnes of exports [annually], but in the first half of this year, they've done less than 200,000 tonnes,” Ahmed El Hoshy, Fertiglobe’s chief executive, told The National.

“China being absent from the market and kind of having a very strong domestic market is definitely constructive,” he added.

The global urea market is expected to reach about $160.78 billion by 2032, up from $131.54 billion in 2022, according to Precedence Research.