Algeria, Oman Advance 50% Expansion of Arzew Fertiliser Plant

Algeria and Oman have taken a major step toward expanding fertiliser production at the Algerian-Omani Fertiliser Company (AOA) plant in Arzew, Oran province. The two countries have formally agreed to launch the facility’s expansion, which is expected to increase total production capacity by 50% from current levels.

The agreement follows nearly a year of discussions, technical assessments and commercial consultations between the two sides. The project has now moved beyond the planning and study phase into implementation, allowing the partners to begin mobilising the resources required for construction and capacity expansion.

The agreement was announced by Algeria’s Ministry of Hydrocarbons after a meeting between Mohamed Arkab, Minister of State and Minister of Hydrocarbons, and Sheikh Saad bin Suhail Bahwan, Chairman of Suhail Bahwan Holding Group. Oman’s Ambassador to Algeria, Saif bin Nasser bin Rashid Al-Badaei, Sonatrach CEO Noureddine Daoudi and senior government officials also attended the meeting.

The expansion will include the installation of a new production line at the AOA facility. The additional line is expected to raise the plant’s overall production capacity by half compared with its existing output. The partners have also approved an action plan to initiate the expanded industrial and production operations.

Ammonia and urea will remain key products under the expansion programme. Increasing production of these fertilisers is expected to strengthen the use of Algeria’s domestic resources while supporting greater downstream processing and value addition within the country.

Algeria’s hydrocarbons ministry has pledged to provide the necessary support and address potential obstacles that could slow implementation. The objective is to accelerate the project and ensure that the strategic partnership between state-owned Sonatrach and the Omani group progresses according to the agreed schedule.

The expansion also reflects broader efforts by Algeria and Oman to deepen economic cooperation. Both sides highlighted their long-standing bilateral relationship and the growing momentum in commercial and industrial collaboration.

Officials from both countries emphasised their political commitment to developing a strategic partnership based on economic complementarity and mutual benefits. The fertiliser project could therefore serve as an important example of bilateral industrial cooperation while strengthening Algeria’s position in the global fertiliser market.

Product and Price Impact

The AOA expansion is likely to have a positive long-term impact on ammonia and urea supply, particularly in North Africa and export markets. The 50% capacity increase could improve Algeria’s export availability and strengthen competition among international suppliers. Higher urea availability may place moderate downward pressure on regional urea prices once the additional output reaches the market, while ammonia prices could also face softer conditions if production rises faster than demand. However, the near-term price impact should remain limited because the project is still entering its execution phase. For ChemAnalyst-tracked commodities, ammonia and urea prices could face bearish pressure over the medium to long term, subject to commissioning timelines, natural gas costs and global fertiliser demand.