The OCP Group Plans to Invest $7 Billion in Ammonia Plant Using Green Hydrogen
OCP Group told Reuters it plans to invest $7 billion in an ammonia plant using green hydrogen produced from renewable fuels, as one of the world’s largest phosphate and fertilizer companies seeks to scale up production and meet carbon reduction goals.
Morocco’s state-owned OCP group is one of the largest importers of ammonia, having spent $2 billion in matter prime last year as global prices soared due to the war in Ukraine.
The impact of the supply war has also led to an increase in the global importance of the “OCP” group, while its efforts in the field of renewable energy are an important part of the Moroccan industrial strategy to reduce energy imports.
The group said it has reached an agreement to purchase ammonia from North America questyear to avoid the impact of supply problems.
The Group’s Long-Term Plans for Ammonia Production
In the long term, the group plans to strengthen the local supply chain, including through the construction of a factory in Tarfaya, in southern Morocco.
By 2026, the plant will produce 200,000 tons of ammonia annually, then scale up to one million tons by 2027 and three million tons by 2032, according to a response via email Reuters questions.
Its plan to use hydrogen from solar and wind electrolysis as a feedstock to produce ammonia is part of a $13 billion strategy the company announced in December to shift to renewable energy.
Morocco invests heavily in renewables, in partly due to its land, sun, wind and long coastline, but also due to the lack of oil or gas and its thorny relations with neighboring Algeria, an oil and gas producer.
The government wants to increase renewable energy to 52% of existing capacity, up from 38%, by 2030. It is also looking to scale up desalination to help cities and agriculture cope with the effects of years of drought.
OCP said it plans to rely entirely on desalinated water for industrial operations by 2027 and told Reuters it will issue tenders early next year to expand desalination capacity at Safi and Jorf Lasfar on the Atlantic .
The Tarfaya project includes a desalination plant powered by renewable energy with a capacity of 60 million cubic meters per year to power industrial plants.
Expansion in Africa
Over the past year, OCP reported revenues of $11.29 billion due to higher pricing, in 40% increase over 2021, and income of $4.9 billion, in 38% increase. Profits are down questyear due to lower prices, but OCP expects them to recover in the second half.
OCP, which holds the largest phosphate reserves in the world and plans to increase its fertilizer production capacity to 15 million tons questyear and to 20 million tons in 2027, he said: “We will increase our production to meet the growing demand.”
The company has promised to direct four million tons of fertilizer production to the African market as it has installed mixing units and monitored soil composition on aarea of 30 million hectares to help produce fertilizers in based on soil requirements.
The group’s investments in sub-Saharan Africa in recent years, in where the supply of fertilizers plays a crucial role for economic development, reflect an image of expansion of other Moroccan companies on the continent, which helps to consolidate the growing diplomatic contact.
The group told Reuters it will begin production at its fertilizer plant in Nigeria at the end of 2026, and will start pre-production in its plant in the same year in Ethiopia.