State firm Qatar Petroleum (QP) has sold its 25% stake in Qatar Fertilizer (Qafco) to state-led investor Industries Qatar (IQ) for $1bn. IQ is owned 51% by QP and 19% by the General Retirement and Social Insurance Authority, with 30% traded on the Qatar Exchange. Announcing the deal on 23 August, IQ said the purchase is “consistent with IQ’s strategy to build its presence and create value across the downstream sector.” The deal will provide QP with cash for investment at a time when its key LNG business is being constrained by low prices – though the $1bn raised is peanuts versus QP’s plan for counter cyclical investment to expand LNG capacity from 77mn t/y to 110mn t/y (MEES, 22 May).
The deal gives IQ full control of Qafco, which operates six production trains in the Mesaieed industrial zone in southeast Qatar with combined capacity to produce 3.8mn t/y of ammonia and 5.6mn t/y of urea. IQ said that the effective date of the transaction will be 1 January 2020. As part of the deal, Qafco has entered a new gas supply agreement with QP that runs from 1 August 2020 to 31 December 2035. (CONTINUED - 188 WORDS)