Hope for fertilisers in Abu Dhabi nuclear programme

Fertil, a fertiliser joint venture based in Abu Dhabi, has high hopes the country's nuclear power programme will preserve local supplies of the company's most critical feedstock. That happens to be methane, the main component of natural gas, which the Emirates already imports to meet booming domestic demand from its power and industrial sectors. Gas is in short supply in every GCC state except Qatar, partly because much of the region's gas reserves are locked in reservoirs that are technically difficult to exploit. The Gulf's expanding petrochemicals industry is feeling the pinch, and nowhere more than in the production of the nitrogen fertilisers that are Fertil's speciality.

That is because the makers of ammonium salts and urea, the nitrogen-containing compounds that constitute the most important class of chemical fertilisers worldwide, compete directly with power plants for methane. Most other bulk petrochemicals are derived either from naphtha, a type of light oil, or from gases such as ethane and propane, which are stripped from natural gas and sold separately. Populous south Asian countries such as India, which have huge and expanding needs for nitrogen fertilisers, are turning to processes such as the gasification of coal and the harnessing of agricultural waste to provide alternative sources of methane, according to speakers at a fertiliser conference in Dubai last week organised by the Gulf Petrochemicals and Chemicals Association.

But this is problematic because the gas from these processes contains pollutants such as heavy metals and oxides of sulphur and nitrogen that are difficult and costly to remove, said Richard Saure, the sales director of the ammonia and urea division of Uhde, a German chemical engineering company. These complications give an advantage to nitrogen-fertiliser ventures based in Qatar, which sits on the world's biggest gasfield, and in Abu Dhabi, where nuclear power generation is expected to free up gas for more profitable uses than being burnt to drive turbines.

Fertil - a venture between Abu Dhabi National Oil Company and the French petroleum group Total - and Qafco, Fertil's counterpart in Qatar, both expect substantial opportunities to increase exports to India and other Asian clients. "We are counting on nuclear power," said Mohammed al Rashid, the general manager of Fertil. In Abu Dhabi, the nuclear programme is clearly expected to underpin an immense petrochemicals expansion that is under way in the emirate. That expansion is an early step in the Government's economic diversification scheme. It is aimed at extracting greater value for the emirate from its oil and gas resources.