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8 facts about the fertilizer plants crisis in Egypt

Discover the key facts about the ongoing crisis in Egypt's fertilizer industry as major plants halt operations due to natural gas shortages.
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  1. Abu Qir Fertilizers halts operations again:

    • For the second time in June, Abu Qir Fertilizers Company suspended operations at its three plants due to a shortage in natural gas supplies. The company had to shut down to prevent damage to its facilities as gas reserves in the national network dwindled under high demand​.
  2. Impact of extreme heat:

    • The unprecedented heatwave in Egypt, with temperatures soaring above 40 degrees Celsius, has significantly increased electricity consumption. This surge in demand has strained the natural gas network, as gas is redirected to meet the high electricity needs, affecting supplies to industrial plants, including fertilizer factories​.
  3. Government measures:

    • In response to the crisis, the Egyptian government has implemented load-shedding schemes to manage electricity consumption. President Abdel-Fattah El-Sisi has instructed the government to take immediate measures to reduce power outages, while Prime Minister Mostafa Madbouly announced plans to import additional fuel and gas to alleviate the shortages​.
  4. MOPCO also suspends operations:

    • The Misr Fertilizers Production Company (MOPCO), another major player in the Egyptian fertilizer market, also halted operations at its three plants. The shutdown was a precautionary measure due to the pressure on gas reserves, which were impacted by the heatwave and regional supply interruptions​​.
  5. Economic consequences:

    • The suspension of fertilizer production has broader economic implications. For instance, Abu Qir Fertilizers is the sole producer of carbon dioxide used in the cooling processes of the food and beverage industry. Companies like Coca-Cola Hellenic Egypt have raised concerns that continued disruptions could halt their production, leading to significant losses, especially during peak summer demand​.
  6. Previous interruptions:

    • This is not the first time such issues have occurred. In March 2015, Abu Qir Fertilizers also suspended operations at one of its plants due to similar natural gas shortages, indicating a recurring problem in managing energy resources under extreme conditions​.
  7. Efforts to stabilize gas supplies:

    • Earlier in June, Abu Qir Fertilizers resumed operations after stabilizing gas pressure in coordination with the Egyptian Natural Gas Company (GASCO). However, recurring supply disruptions highlight the ongoing challenges in balancing gas allocation between industrial and residential needs during peak consumption periods​​.
  8. Future outlook:

    • The government aims to restore and stabilize gas supplies to fertilizer plants gradually. With plans to import additional natural gas and mazut, authorities hope to reduce power outages and normalize industrial operations by mid-July, ensuring that energy-intensive industries like fertilizer production can resume regular activity​​.

These facts underscore the critical interplay between energy supply and industrial activity in Egypt, particularly under extreme weather conditions.