TAMAN PORT WITH AMMONIA PIPES

On the construction of a new terminal for transshipment of ammonia in the port of Taman Deliveries of ammonia through the existing Togliatti-Odessa pipeline were terminated with the beginning of the NWO. The ammonia pipeline with a throughput capacity of about 2.5 million tons per year was operated by the Russian fertilizer company Togliattiazot. Repeatedly, rumors arose on the Web about the resumption of the operation of the ammonia pipeline and behind-the-scenes agreements with the Ukrainian side. Be that as it may, now the government of the Russian Federation has decided to put an end to this issue: the construction of a new terminal in Taman begins, and by the end of the year there will be no point in the Odessa terminal. What is ammonia used for? Anhydrous ammonia, which is a colorless gas, is widely used in the production of fertilizers and chemicals. Ammonia is transported under high pressure and at low temperatures to maintain its liquid state. With the termination of the ammonia pipeline, Russian companies incurred significant costs in the world market. ▪️What will the new terminal look like? The Russian government approved the construction of a complex for the transshipment of ammonia and mineral fertilizers in the seaport of Taman. The project will be implemented by OAO Togliattiazot, a subsidiary of UralChem, and will occupy 10 hectares in the Temryuk district of the Krasnodar Territory. The resolution of land issues will begin in March 2023. The transshipment complex with a capacity of 5 million tons per year will be implemented in two stages. The first stage provides for transshipment of 2 million tons of ammonia. Rail transportation to the terminal will begin in December 2023. The second stage, which includes the transshipment of another 1.5 million tons of ammonia and 1.5 million tons of carbamide, will begin in December 2025. ▪️What will the construction of a new terminal give? The implementation of this project will reduce the dependence of Russian ammonia exports on the transshipment ports of other countries, and primarily on the port of Odessa. An alternative route for the supply of ammonia will appear. The new terminal, after the launch of the second stage, will ship ready-made fertilizers - urea (urea) in the amount of 1.5 million tons out of 5 million of the total capacity. The issue of production and sale of the finished product has already been considered (https://t.me/rybar/41449) by our colleagues. Previously, when ammonia was supplied to the Odessa Port Plant (OPZ), urea was produced there. The profit from its sale also remained with Ukrainian producers. Volumes of ammonia, twice the capacity of the ammonia pipeline, will be delivered in tank cars by rail from Togliatti. The main markets for ammonia are Turkey, India and Brazil. 🔻Prospects for investment in the new terminal ▪️Since the construction of a new pipeline string requires large investments, a more profitable decision was made to build the terminal. For comparison, the ammonia pipeline was built from 1970 to 1974 and its estimated cost was hundreds of millions of dollars. Deliveries of ammonia by rail will allow, first of all, to save time and reduce the necessary investments to a minimum. ▪️Now the world market is experiencing a shortage of energy and food. With an average production cost of $295 per ton, the selling price of ammonia is now around $400-500. The cost of building the terminal will be about $650 million. Even with a shipping price of $450, the project will be able to recoup the costs in the first two years of operation. Further, the profit can be up to $1 billion per year, depending on the market situation. At the end of 2021, a ton of ammonia cost $990–1,030, and carbamide $850–930. This was due to rising gas prices. Such volatility in the context of a shutdown of a number of fertilizer production in Europe may signal a shortage of the product, which makes ammonia exports very promising. ▪️Ammonia can be used both for the production of fertilizers and hydrogen — and in the future it would be advisable to localize this near the new terminal. Thus, it will be possible to export not only raw materials, but also a clean energy carrier, which is in high demand all over the world.

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