Applies to a range of NPK fertilizers. Nitrogen based fertilizers (ammonia, urea), phosphates and potash (K2O).
They are characterised by:
- Technically complex
- Significant equipment and material which may need to be imported
- Products usually sold on the open market
- Earns foreign exchange for the product which is sold on international markets.
- Production which usually increases rapidly to the design capacity where it stays for the duration of the project (see the diagram below).
- Annual maintenance shutdown which will reduce revenues and variable operating costs for about a month.
How Promoter handles Fertilizer Projects
Promoter can produce models for one or more of each of the following plants: ammonia, urea, nitric acid, ammonium nitrate and urea ammonium nitrate (UAN), phosphoric acis and potash (MAP, DAP, NPK). It carries out a mass balance and determines how much of the product from each plant must be used as feedstock for other downstream units. The balance of the production is exported.
See the diagram below for the typical configuration of a UAN project. Configurations for other combinations produce simple diagrams. Promoter will display the design configuration in the design tab of the project file.
Typical Project Cash Flows
The revenues are essentially constant in real terms over the life of the project. However, two competing effects will change the shape. If the local and more profitable market is increasing in size, then the revenues will increase over time. However, if the commodity price is reducing in real times, then the revenues will decrease. In practice, both effects play a part.
The first two or three years will typically show a utilization which is below the ultimate figure, as managers and operators become more familiar with and better able to operate the plant.
At the end of the project's life, the plant may be sold for scrap, providing a small additional cash flow to the project.