Dutch fertilizer and industrial chemicals group OCI and Abu Dhabi National Oil Company (ADNOC) are to partner their fertilizer operations in the Middle East and North Africa (MENA).

The joint venture will create the world’s largest export-focused nitrogen fertilizer platform as well as MENA’s biggest producer with output of 5 million t/y of urea and 1.5 million t/y of ammonia. OCI will own 58% and ADNOC 42% in the combined entity, which will be based in Abu Dhabi, United Arab Emirates (UAE), and have annual revenues of $1.74 billion, based on 2018 pro forma figures.

The transaction is expected to close in the third quarter of 2019, subject to the usual legal and regulatory conditions.

OCI’s MENA facilities can produce up to 3.2 million t/y of gross ammonia and 29 million t/y of urea. The company’s assets include Egypt Fertilizer Company, a 60% stake in Egypt Basic Industries Corp., a 51% share in Algeria’s Sofert plus a global trading platform based in the UAE.

ADNOC Fertilizers operates two plants in Ruwais – Fertil-1 and Fertil-2 – which have a combined capacity of 1.2 million t/y of ammonia and 2.1 million t/y of urea. The group sells granulated urea to markets in the Indian subcontinent, the US, Latin America and Australia. ADNOC is currently the sole shareholder in ADNOC Fertilizers, having bought Total’s 33% stake late last year.

The companies said the partnership will strengthen their market share and better serve customers, supported by a storage and distribution infrastructure that has access to key ports on the Mediterranean, Red Sea and Arabian Gulf.

ADNOC Fertilizers added that it has also signed a new long-term supply agreement with ADNOC for gas feedstock for its operations at Ruwais.

OCI’s CEO Nassef Sawiris said the partnership creates a “first-of-its-kind export platform with best-in-class cash conversion metrics” and “significant potential for future growth and value creation”.

Sultan Ahmed Al Jaber, ADNOC’s CEO and UAE Minister of State, commented: “Pooling our assets and capabilities is a value-enhancing step for both companies, allowing us to leapfrog competitors to become the top nitrogen export platform globally. It will also enable us to access new markets, benefiting both existing and new customers.”

Al Jaber will be chairman of the jv’s board, while Sawiris will be CEO. The board will comprise six members nominated by OCI and four nominated by ADNOC.