CAIRO: After failing to build a fertilizer plant in Ras El Bar, Agrium Egypt is continuing to build a marine pier at the port of Damietta to be used as an exporting base for products of the Misr Oil Processing Company (MOPCO).
Local press reports claim that the company has yet to submit an environmental impact assessment report for the pier and that the previous approval the company received from the Ministry of Environment did not include approval for the pier.
Construction of the pier is to the tune of LE 60 million and Agrium Egypt has a 25-year concession from the Damietta Port Authority for the pier which costs $4 million.
After fierce local opposition led to the cancellation of the nitrogen fertilizer plant, Agrium decided that it would still continue with an agreement that would provide it with natural gas at a price cheaper than what’s available in the market.
Civil society groups are opposing this latest project because the gas contract has shifted from the state-owned company to a private one. Last August, Agrium Inc said o Misr Oil Processing Company, S.A.E. of Egypt (MOPCO), will acquire its EAgrium project through a share swap in which EAgrium will become a wholly-owned subsidiary of MOPCO and the shareholders of EAgrium will become shareholders in MOPCO.
At the time, Agrium said it will own a 26 percent interest in the combined entity and it anticipates earnings contributions beginning in the fourth quarter of 2008.
“Damietta will begin a campaign against this contract similar to the campaign it held against the proposed plant, said Abdallah Helmy, member of the Popular Committee Against the Exportation of Gas.
The campaign’s plan is to question the legality of changing the contract in court, as it is an illegal act, Helmy previously told Daily News Egypt Newspaper reports place the price of the MOPCO deal – signed in 1998 for 20 years – at a third of current world prices, amounting to a loss of $600 million in just six months according to Helmy.
“The corruption is rife in long term gas contracts and the financial losses resulting from them are huge, Helmy said.
Agrium’s annual share of urea produced by MOPCO will eventually reach over half a million tons by 2011, or 26 percent of the plant’s total production which they will receive at the fixed price.
The initial deal with Agrium, had their plant been built, would have resulted in a price review for the gas after four years.
Residents of Damietta had been opposed to building the nitrogen plant in the tourist spot Ras El Bar, and after a drawn out campaign the government decided to cancel the project.
