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Abu Dhabi, UAESaturday 22 September 2018

Adnoc and Morocco's OCP sign long-term sulphur supply agreement

The capital’s sulphur production currently stands at 6 million tonnes a year and has seen its global market share nearly double

A view of Al Hosn Gas Plant. The commissioning of Abu Dhabi's sour gas development at the Shah field has led to a surplus in sulphur production. Photo Courtesy: ADNOC
A view of Al Hosn Gas Plant. The commissioning of Abu Dhabi's sour gas development at the Shah field has led to a surplus in sulphur production. Photo Courtesy: ADNOC

Abu Dhabi National Oil Company signed a long-term agreement to supply sulphur to phosphate producer OCP Morocco, the world’s largest sulphur importer.

Adnoc, which supplied 2 million tonnes of sulphur to Morocco last year, agreed with OCP to “consider a gradual increase of the contracted volumes” of granulated sulphur through to 2025, the Abu Dhabi company said.

The oil company is one of the world’s largest producers of sulphur, as a result of its significant reserves of sour gas, which, after processing, yields the yellowish chemical as a byproduct.

The capital’s sulphur production currently stands at 6 million tonnes a year and has seen its global market share nearly double from 6 per cent in 2014 to 11 per cent in 2016.

The main catalyst behind the growth is the commissioning of the sulphurous Shah development in 2015, which has resulted in surplus production of the chemical that finds uses in agriculture and industry.

With more unconventional gas projects targeted as part of its recently-approved Dh400 billion spending plan, Adnoc expects the amount of sulphur available for export to increase in parallel.

The UAE has long targeted becoming the world’s biggest exporter of sulphur, a niche product for hydrocarbon producers who look at lower chemical emissions as harmful to the environment.

OCP, headquartered in Casablanca, is one the biggest producers of phosphate-based fertiliser compounds in the world.

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Adnoc to invest Dh400bn as it eyes downstream expansion

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With more unconventional gas projects targeted as part of its recently-approved Dh400 billion spending plan, Adnoc expects the amount of sulphur available for export to increase in parallel.

The UAE has long targeted becoming the world’s biggest exporter of sulphur, a niche product for hydrocarbon producers who look at lower chemical emissions as harmful to the environment.

OCP, headquartered in Casablanca, is one the biggest producers of phosphate-based fertiliser compounds in the world.

“Since 2008, OCP has initiated the largest investment programme in the fertiliser industry with the objective of doubling its mining capacity and tripling its fertiliser capacity,” said Mustapha El Ouafi, managing director at OCP.

“Our ambitious program will see OCP further strengthen its position as the world’s largest fertiliser producer and a leading player in the agri-business value chain,” he added.

The agreement between both parties comes amidst Adnoc’s plans to double its current sulphur production as it looks to branch into new markets.

Speaking at the Middle East Sulphur conference in Abu Dhabi in February, Omar Al Suwaidi, Adnoc’s gas management director, said the oil company was considering partnerships with phosphate-based fertiliser companies in Africa, Asia, South America and

Australia.

China is the world’s largest producer of sulphur, at 11 million tonnes a year, followed by the United States at just over 9 million tonnes a year.

The market grew at about 2.7 per cent a year from 2000 to the end of 2014. But that is forecast to slow to 2.2 per cent a year to the end of 2019, according to industry research firm IHS Markit.

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