Petrobras Releases Teaser for UFN III After Failing to Sell Fertilizer Plant to Russian Group Acron, Which Could Help Brazil Reduce Dependence on Imported Product as the Country Faces Challenges from the Ukraine-Russia War

Operation of UFN3, which had capacity projected by Petrobras at 3,600 tons/day of urea and 2,200 tons/day of ammonia, has been with construction works stopped since 2014.

Petrobras disclosed in a significant event to the Market on the afternoon of June 1, that following the notice published on 04/28/2022, it began the stage of disclosing the opportunity (teaser), regarding the full sale of the Nitrogen Fertilizers Unit III (UFN-III).

The UFN3 construction was halted in December 2014, with about 80% of the work completed, after Petrobras terminated the contract with the consortium responsible for building the plant, which had already consumed over R$ 3 billion at that time.

According to Petrobras, the teaser, which contains the main information about the opportunity – including the forecast that the buyer commits to completing the plant – as well as the eligibility criteria for selecting potential participants, is available on Petrobras’ website.

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“The main subsequent stages of the project will be informed to the market in due course”, the state-owned company stated.

Petrobras Fails to Sell the Fertilizer Plant (With Construction Stopped Since 2014) to Russian Group Acron, and Multinational Unigel Enters the Bid for UFN3

Petrobras disclosed in a significant event to the Market on April 28, that the process of selling the Nitrogen Fertilizers Unit III (UFN-III) in the municipality of Três Lagoas, to the Russian group Acron was not completed, “considering that the proposed business plan by the potential buyer, in substitution for the original project, made certain governmental approvals necessary for the continuity of the transaction impossible.”

The UFN-III is an industrial unit for nitrogen fertilizers located in Três Lagoas, in the state of Mato Grosso do Sul. The construction of UFN-III started in September 2011 but was interrupted in December 2014, with a physical progress of about 81%. Once completed, the unit will have a projected production capacity of 3,600 t/day of urea and 2,200 t/day of ammonia, respectively.

One of the Largest Petrochemicals in Latin America Interested in Buying UFN3

Petrobras’ fertilizer plant is already on the radar of new companies. Aiming to expand its operations in the sector, Unigel, one of the largest petrochemicals in the production of nitrogen fertilizers in Latin America, is interested in buying the project designed to produce urea and ammonia, seeking to expand its operations in the sector. This information was confirmed by the CEO to Reuters.

The operation of the unit, which had capacity projected by Petrobras at 3,600 tons/day of urea and 2,200 tons/day of ammonia, could help Brazil reduce its dependence on imported products, while the country deals with difficulties arising from the war between Ukraine and Russia.

“The company already invests in fertilizers in Brazil, and is interested in completing the UFN-III and occupy 50% of the fertilizer market”, emphasized one of Reuters’ sources. 

Unigel has over 2.9 million tons of installed capacity, being 925 thousand tons of ammonia, 1.125 million tons of urea, and 670 thousand tons of ammonium sulfate, according to company information.