Nitrogen fertilisers

Operating Results

  • Ammonia output was 1.822 mn t (down 5% year-on-year). This decrease in output was caused by a long-term overhaul of the ammonia unit at Dorogobuzh.
  • Record high output of nitrogen fertilisers, at 3.017 mn t (up 1% year-on-year), was possible due to upgrades that increased the Acron site’s UAN unit production capacity to 1 mtpa

Development Plans

  • Construction of a new 700,000-tpa ammonia facility in 2012–2015 at the Acron site in Veliky Novgorod.

Key Trends in the Nitrogen Fertiliser Market in 2014

  • Prices increased in early 2014 because of high demand before the spring sowing season in the Northern Hemisphere. However, by April prices reacted negatively to oversupply from China, which reduced its export duties.
  • Limited supply from traditional nitrogen exporters, primarily Ukraine, Egypt and Iran, and higher purchasing activity in advance of the autumn seeding season in the third quarter encouraged prices to return to early 2014 levels.
  • IFA estimates show consumption of nitrogen fertilisers up 0.8% in 2014 to 111.8 mn t N. Consumption increased in major markets such as India and Brazil. IFA expects consumption growth to reach 1.3% in 2015.

For more details see Fertiliser Market Overview

2014 Operating Results
(‘000 t)

  Nitrogen Fertilisers
Ammonia AN UreaUANNitrogen fertilisers,
total
Output
Acron (Veliky Novgorod)  1,221 560 646 937 2,143
Dorogobuzh 526 874 –– 874
Hongri Acron 75 –– –– –– ––
Total output 1,822 1,434 646 937 3,017
Incl. in-house consumption 1,707 119 417 –– 536
Total commercial output 115 1,316 229 937 2,481
Year-on-year –-26% -–8% -–22% 16% -–2%
Sales* 112 1,307 237 967 2,512

Acron (Veliky Novgorod)

Ammonia. The Company posted 2014 ammonia output of 1.221 mn t, which, while only 1,000 t higher than the previous year, set a record for the facility. Marginally higher output was accompanied by a 6 m3/t drop in natural gas consumption, bringing average consumption across Acron’s ammonia units to just 1,059 m3/t. Natural gas was consumed at a rate of 1,075 m3/t at the Ammonia-2 unit and 1,043 m3/t at the Ammonia-3 unit, which is the lowest consumption rate in the facility’s history. Acron’s Ammonia-3 unit uses the least natural gas of any facility in Russia (according to the Scientific Research and Design Institute for the Nitrogen Industry and Organic Synthesis Products (GIAP)).

In 2014, Acron moved ahead with technical upgrades of its ammonia units to further reduce gas consumption, enhance reliability and improve safety. Almost the entire output of ammonia (93%) was used to produce fertilisers and industrial products.

AN. AN output was 777,000 t (560,000 t for agriculture and 217,000 t for industrial purposes) in the reporting year; this is the highest level in 28 years of production. Output was up 0.2% year-on-year. In-house consumption of AN for UAN production was 67,000 tpa.

Urea. Urea output was down 1.5% to 646,000 t in 2014. The Company shifted its focus to other chemical products containing ammonia in the periods when sales of urea were less profitable than other of nitrogen fertilisers. Acron processed 65% (417,000 t) of its total urea output internally to produce UAN and urea-formaldehyde resins.

Acron performed a number of upgrades at its urea units in 2014, including the launch of a urea silo warehouse, which improves the quality of urea used to produce amine resins, and the commissioning of evaporation unit No. 5 and side-mounted fluidised-bed equipment.

In the reporting period, the Company’s shipments of high-purity urea for AdBlue fluid, which is used to reduce nitrogen oxides emissions by heavy trucks, were up 53.3% to 18,000 t. The Group began supplying this product to Latin America in 2014.

UAN. UAN output was up 16% in the reporting year to a record high of 937,000 t, due to upgrades that boosted the unit’s capacity to 120 t/h (1 mtpa). In 2014, Acron (Veliky Novgorod) became the largest UAN producer in Russia.

Dorogobuzh

Ammonia. Ammonia output was down 90,000 t (15%) to 526,000 t in the reporting year, due to a scheduled 43-day overhaul of the ammonia unit in September and October 2014. Upgrades reduced the unit’s natural gas consumption rate 0.1% to 1,121 m3/t. Of the total ammonia output, 97% was used to produce fertilisers.

AN. AN outputwas down 96,000 t (10%) year-on-year to 888,000 t in the reporting year (including 14,000 t of AN for industrial use), due to reduced primary commodity ammonia output. In-house AN consumption for dry-blended fertiliser production was 52,000 tpa (6% of total AN output).

Hongri Acron

Ammonia. Ammonia output was down 7% in the reporting year to 75,000 t due to a new operating strategy aimed at minimising finished product inventories. The complex fertiliser production plan required lower ammonia output, while commercial ammonia shipments increased 5% to 19,000 t.

Development Investments

Ammonia-4 is the Group’s project toconstruct a large, 700,000-tpa ammonia unit at the Acron site in Veliky Novgorod. The new plant will meet the facility’s growing demand for nitrogen feedstock. Adopted in 2011, the project will cost an estimated USD 400 mn, with the end of construction and launch scheduled for the end of 2015.

2012

  • Basic engineering of ammonia unit, drafting design and specifications
  • Selecting major and auxiliary equipment suppliers
  • Preparing the construction site: geological and geodesic survey completed, technical survey of current structures completed, unused buildings dismantled

2013–2014

  • Preparation and approval of design and specifications
  • Signing contracts and purchasing equipment
  • Construction, installation of equipment and utilities
  • Personnel training

2015

  • Completion of construction and equipment installation
  • Start-up and commissioning

My Annual Report

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