Unique cooperation behind the world's largest fertilizer factory

April 23, 2004, 14:00 CEST

The Emir of Qatar will open the fourth construction stage of what will now be the world's largest fertilizer plant on Sunday 25 April. The occasion also marks over 35 years of a unique cooperation between Hydro and Qafco.

"The development work for which Hydro's project organization has been responsible has gone very well. Deliveries are on time and at the agreed price, and Hydro has built up an excellent reputation in Qatar," says Zafer Nahawi, who has led Hydro's representative office for the Middle East since 1991.

This expansion of the fertilizer plant increases the production capacity of Qatar Fertilizer Company (Qafco) to two million tonnes ammonia and 2.8 million tonnes urea, making Qafco the world's largest producer of these goods.

Hydro has led each stage of the expansion, providing both technology and personnel with experience and expertise in both development and operations. The German company Uhde was awarded the construction contracts for Qafco 3 and 4, and has had up to 200 engineers engaged in the Qafco 4 project.

Challenging but rewarding
"The project has had a number of challenges to face and has struggled to keep within the timetable. Coordination between Qafco and Uhde has also been challenging. And some contractors have not been able to deliver according to plan. However this was resolved in the last few months, and all focus has been directed towards completing the project. Qafco now takes over a top-quality plant at a very good price. It has been rewarding to take part in such a large development," says Hydro's head of the Qafco development, Thor Sandal.

Hydro was the first non-British foreign company to be engaged in Qatar, and, according to Nahawi, has brought Qafco into the same class as the best-run companies in the country.

"Qafco has won several prizes for best company in both safety and operational regularity. Hydro, with its experience, technology, expertise and culture, has played an important part in this. Hydro has brought out the best in both companies, and based it activities on team work using local resources. The company has truly earned respect," concludes Nahawi.

A telephone call from London...

On 16 August 1968, the managing director of Hambros Bank in London phoned to ask whether Hydro was interested in taking part in a fertilizer project in Qatar. This telephone conversation was the start of a long and fruitful cooperation between Hydro and Qafco.

Qatar – with 800,000 inhabitants, only 30 percent of whom are Qataris - made significant oil discoveries in the fifties and sixties, with associated gas discoveries. The Emir wanted to develop industry based on this gas, and the decision was therefore taken to establish an ammonia and urea plant with production based on natural gas. At the end of the eighties enormous new gas discoveries were made.

Qatar Fertilizer Company now has four fertilizer plants. Qafco 1 came onstream in 1973, Qafco 2 in 1979 and Qafco 3 in 1997. The foundation stone for the fourth Qafco plant was laid on 15 October 2001. The new ammonia and urea plants that are now completed have a daily capacity of 2,000 and 3,000 tonnes respectively.

The new factory also has the world's largest granulation unit which is based on Hydro technology, the world's largest bulk store for urea, with a capacity of 160,000 tonnes, and one of the world's largest ammonia tanks, which can hold 45,000 tonnes.

The development has cost just over NOK 3.5 billion.

Hydro also entered into an agreement with Qafco on sales and marketing of some of the urea production in the international fertilizer markets, in connection with this development. This agreement has been transferred to Yara International, since the demerger of Hydro's agri activities in March this year and its formation as a separate listed company. Yara has taken over Hydro's 25 percent ownership interest in Qafco.