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June 25, 2013

MHI, Sojitz and RHI to build large-scale ammonia plant in Russia

Gerald Ondrey

Mitsubishi Heavy Industries, Ltd. (MHI; and Sojitz Corp. (both Tokyo, Japan; have received an order from PhosAgro-Cherepovets, a subsidiary of the Russian fertilizer producer PhosAgro, for a project to construct the largest ammonia plant in the Russian Federation. The order was won jointly with Renaissance Heavy Industries (RHI; Ankara, Turkey). The investment cost of this project would be $785 million.

The ammonia plant will be built in the city of Cherepovets approximately 400 km north of Moscow. It will have capacity to produce 2,200 metric tons (m.t.) per day) of ammonia using natural gas as feedstock, and will adopt the process technology of Haldor Topsøe A/S (Lyngby, Denmark; The plant is slated to go on-stream in 2017.

The order contract calls for provision of plant engineering, procurement and construction (EPC). MHI, as leader of the consortium, will be responsible for basic and detailed design work, equipment procurement, and dispatch of technical advisors for installation and test operation. Sojitz will handle coordination between related parties and transport within Russia, leveraging its business experience and track record in Russia. RHI will be in charge of construction work and transportation.

PhosAgro is Europe's largest producer of phosphate-based fertilizers and also produces high-grade phosphate rock, ammonia and nitrogen fertilizers. The company is currently seeking to upgrade its aging existing facilities and increase ammonia production, and this stance led to its decision to undertake this new ammonia plant construction project. Previously MHI has received orders for an ammonia/urea plant for the Republic of Tatarstan in 2011 and an acrylic acid plant for the Republic of Bashkortostan in 2012. MHI and Sojitz believe that the team's track record in plant construction in the Russian Federation was highly evaluated and contributed largely to the latest award.

Demand for ammonia-based fertilizers is expected to continue expanding steadily worldwide amid rising food production in response to global population growth. In Russia, which is one of the world's leading producers of natural gas, interest in fertilizer production is increasing as the country seeks higher value from its natural gas resources and pursues advances in industrial development and agriculture. Russia is presently seeing robust expansion in demand for replacement of fertilizer plants that were constructed twenty to thirty years ago.




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