Lifeco’s resumed fertiliser output boosts Norwegian partner Yara

By Hadi Fornaji.

Tripoli, 2 May 2014:

The restart of the Lifeco joint venture fertiliser plant at Brega has brought good news to . . .[restrict]foreign partner Yara . The Norwegian firm, one of the world’s largest fertiliser makers, has just reported reduced profits, even though sales across its 150 country markets were up.

Shut down in January because of a blockade by local militiamen, the Libyan plant, part of a chemical complex at Brega, is now resuming operations.  Lifeco is a joint venture between the state-owned Norwegian company, which holds half the shares and the National Oil Corporation and the Libyan Investment Authority (25 percent each).

The Brega facility is designed to produce 900,000 tonnes of urea and 700,000 tonnes of ammonia a year. It employs 1,200 people. Last year Yara said that it was taking 500,000 tonnes of urea and 400,000 tonnes of ammonia. This seemed to demonstrate that the facility had exceeded designed output.

NOC provides the gas feedstock on a long-term contract linked to international fertiliser prices. Yara takes a lead management role and has overseen a range of upgrades to the plant.

It took two years to cut the deal, finally agreed in 2009. The Lifeco JV took over the running of the Brega operation (two urea and two ammonia plants) from NOC subsidiary Sirte Oil Company. Yet the feedstock was to be supplied through SOC. This former operator also remained in the picture thanks to an agreement which outsourced “a wide range of local services from SOC, including central warehousing, workshop and laboratory services, heavy cranes and marine services, loss-prevention services, housing, canteen and catering services, central office services and transportation.”

In 2011 Yara reported itself to the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim), after it uncovered evidence that bribes may have been part of the Lifeco JV deal.  Two members of the management team were charged in 2012 in connection with unexplained payments made in 2008. [/restrict]