QP Sheds Stake in Qatari Fertiliser Firm for $1bn

Qatar Petroleum (QP) has sold its 25% stake in Qatar Fertiliser Co. (Qafco), the world's largest single-site urea producer, to local conglomerate Industries Qatar (IQ) for $1bn, IQ said on August 23.

The deal will provide QP with funds to help bankroll its LNG expansion plans, which call for an increase in Qatar's liquefaction capacity from 77mn mt today to 110mn mt/yr by 2024-2025, and 126mn mt/yr in 2027.

IQ will become the sole owner of Qafco, which manages a complex in Mesaieed on the Persian Gulf capable of turning out 3.8mn mt/yr of ammonia and 5.6mn mt/yr of urea. Gas is used as its feedstock.

"The purchase of QP's stake in Qafco is consistent with IQ's strategy to build its presence and create value across the downstream sector," the conglomerate said. QP has not commented on the sale.

As part of the deal, which will need approval from IQ's shareholders, QP will also transfer its 40% interest in Qatar Melamine Co (QMC), the owner of a 600,000 mt/yr melamine plant in Mesaieed. The gas producer has also agreed a contract to supply gas to both Qafco and QMC between August 1 2020 and December 31 2035.