Alexandria Fertilizers Company halts operations amid natural gas shortage

EGYPT – The Egyptian Alexandria Fertilizers Company (AlexFert) has temporarily ceased operations at its three factories due to a disruption in the natural gas supply essential for electricity generation.

This precautionary measure is intended to ensure operational safety within the factories, as disclosed by Egypt Kuwait Holding Company (EKH), which owns approximately 75.33 percent of AlexFert’s capital.

AlexFert’s facilities include an ammonia plant with a daily production capacity of 1,200 tons, a urea plant designed to produce 1,750 tons per day, and an ammonium sulfate plant with a daily output of 720 tons.

The company exports roughly 70 percent of its production to Europe and the US, with the remaining 30 percent directed to the domestic market, according to company data.

The natural gas shortage has severely impacted several major fertilizer manufacturers in Egypt.

Last week, Abu Qir Fertilizers, Misr Fertilizers Production Company (MOPCO), Egyptian Chemical Industries Company (KIMA), and Sidi Kerir Petrochemicals (SIDPEC) also temporarily halted operations due to the gas supply crisis.

In response to the interruption, SIDPEC announced the gradual resumption of operations at its factories following the restoration of gas supplies, while Abu Qir has unveiled plans to switch to hydrogen instead of gas to sustain its operations.

The shortage in natural gas supplies, critical for power generation, is attributed to ongoing regional tensions and an unprecedented heatwave engulfing Egypt.

The soaring temperatures have led to a surge in electricity consumption as residents heavily rely on air conditioning, significantly increasing the demand for gas to generate the required electricity.

In light of the energy crisis, Prime Minister Mostafa Madbouly has introduced several measures to reduce electricity consumption.

Starting Monday, commercial stores in Egypt will close at 10 pm, an hour earlier than usual, and power cuts across the country will be extended by an extra hour.

The government has also allocated US$1.18 billion to purchase the necessary quantities of petroleum products, including mazut and natural gas, with the goal of ending power outages entirely by the third week of July.

Despite the gas supply challenges, Egypt Kuwait Holding Company reported a 1.2 percent increase in profits during the first quarter of this year, reaching US$71.97 million compared to US$71.1 million during the same period in 2023.

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