Category: Commodity

India’s Megha Engineering and Infrastructures Limited (MEIL) has won a $225.5 million contract from the Kuwait Oil Company (KOC) for setting up a new gas sweetening and sulphur recovery facility at West Kuwait oilfields. The project, to be developed on a build-own-operate basis with a buyback option for KOC, includes design, construction, operation and maintenance. It will be completed in two years, followed by a five-year operation and maintenance phase.

Prices in sulphur markets have been climbing rapidly for several weeks now due to short supply, reaching their highest levels for early two and a half years, since July 2022. A major cause has been widening Ukrainian drone and missile strikes against Russian oil and gas facilities. In particular, drone strikes in September on the Astrakhan and Orenburg natural gas plants led to Russian sulphur exports being cut drastically, first from around 400,000 tonnes per month to only 100,000 tonnes in October, and then to zero from the 1st of November, as Russia implemented a ban on exports of sulphur used in fertilizer production which was projected to last at least until December 31st. “This decision will stabilise shipments of raw materials to the domestic market to maintain current mineral fertilizer production volumes and ensure the country’s food security,” the government’s press service reported. The restriction applies to the export of liquid, granulated, and lump sulphur. It remains to be seen whether exports of Kazakh material from Ust Luga will be affected, but some Kazakh sulphur is now being sold via Iran.

While north Africa’s sulphur demand is dominated by its phosphate industry, south of the Sahara it is copper, cobalt and uranium mining, leaching and smelting that hold sway over acid production and demand.

Sulphur prices advanced further in October, more than expected, supported by the supply towards the end of summer becoming restricted, with a number of non-mainstream sources facing logistical constraints.

The US Department of Energy has agreed a $1.5 billion loan for the Indiana-based Wabash Valley Resources LLC to finance a coal-powered ammonia plant in West Terre Haute. The project will restart and repurpose a coal gasification plant that has been idled since 2016. However, previous plans to include carbon capture and storage in the project, as agreed as recently as May by the US Environmental Protection Agency (EPA), appear to have been abandoned. The loan comes from the Trump administration’s Energy Dominance Financing Program financed via the so-called “big beautiful bill”. It aims to reduce US dependence on foreign sources of fertilizer and to provide domestic sources of consumption for America’s shrinking coal industry. The facility is aiming to produce 500,000 t/a of ammonia using coal from a mine in southern Indiana as well as petroleum coke as feedstock.

Ammonia producer CF Industries says that it has shipped its first cargo of low-carbon ammonia from its Donaldsonville, Louisiana facility. The 23,500 tonne shipment was purchased by commodities specialist Trafigura to be used in Antwerp, Belgium by engineering materials firm Envalior in the production of low-carbon caprolactam.

Blue ammonia – ammonia produced from fossil hydrogen with carbon capture and storage (CCS) – offers a cheaper alternative than green ammonia for low carbon supply in the short term, and is more suited to retrofits.

l The market looks very tight through the end of the year, though some expect supply to improve in Q4. Prices are unlikely to ease in the coming weeks. l Woodside’s Beaumont New Ammonia Project is now 97% complete, and the producer expects production from the first train in late 2025. There is no information from Gulf Coast Ammonia on when to expect commercial production. l There was an absence of fresh confirmed business into northwest Europe. Still, producers with ammonia capacity in the region are expected to be maximising output given the favourable economics at current spot natural-gas prices at the Dutch TTF.

NextChem subsidiary MyRechemical has been selected by Mana Group and Equinor to conduct a feasibility study for a waste-to-methanol plant at Norway's Mongstad refinery. The project will use NX Circular™ technology to convert urban and industrial waste into chemical grade syngas which will be further processed to produce low-carbon methanol. The facility is expected to produce circular methanol with a low carbon footprint, eligible under the EU Renewable Energy Directive criteria. This methanol could initially replace marine bunker fuel to meet the targets of the FuelEU Maritime regulation, exempting final users from buying ETS credits and paying penalties, and potentially later be used as feedstock for methanol-to-jet facilities to produce sustainable aviation fuel (SAF) compliant with FuelEU Aviation regulation.

By the end of October the ammonia market was facing an acute shortage of spot tonnage, reflected in a $60/t jump in the Tampa price for November. The benchmark Tampa price increased for the sixth straight month to its highest since February 2023 as the global ammonia supply crunch deepened. The surge at Tampa was said to be driven by good demand in the US for direct application combined with a lack of supply. Contributing factors included Nutrien shutting down its nitrogen production in Trinidad, potentially removing around 85,000 tonnes/month from the market. So far, there is no suggestion that other producers in Trinidad will follow suit, and they may even benefit from a boost natural-gas supply given the Nutrien outage, although it is unclear whether the spare gas will be directed to ammonia as opposed to other demand sources.