- Egyptian government announced yesterday it had abandoned US$1.4 billion nitrogen fertiliser project, whose plant was under construction, near Mediterranean coast.
A statement by Egypt's cabinet said it cancelled its deal with Canadian company, Agrium due to public opposition, especially from local community in the Nile Delta over possible environmental and health hazards.
The project was also rejected by Egyptian People's Assembly, which recommended in June that Agrium project which is already under construction should either be moved to another site or have its interests bought out by government.
A cabinet statement said state-owned Misr Oil Processing Co (MOPCO) would acquire shares of subsidiary Agrium Egypt and carry out Agrium's plans on another site further from Ras el-Barr resort in Egypt's northeast.
Agrium spokesperson, said the company has not yet sealed an agreement with Egyptian government, but continues to negotiate compensation for having to cancel a project, which had been approved before it was derailed by protests.
"We are in discussions and one of the options that we are looking at would be a partial ownership of the MOPCO facility," said Richard Downey, company's senior director of investor relations.
In early 2007, Calgary-based Agrium announced a joint venture with three Egyptian state corporations to construct a plant with capacity to produce 1.4 million tonnes of fertiliser.
Meanwhile Agrium has disputed news reports that Egypt's parliament had cancelled the project. It also countered a cabinet statement that MOPCO would buy shares of subsidiary Agrium Egypt and carry out Agrium's plans on another site, insisting no such deal had been struck.
Mr Downey said there was nothing new with respect to cancellation of the project which effectively occurred in April when construction at the plant was halted due to local protests over environmental concerns.
"This is an outstanding opportunity for Agrium to construct and operate a facility in an area with long-term, competitively priced gas, prime access to world markets, and an efficient, well-educated workforce," said Agrium president and chief executive officer Mike Wilson.
Earlier this year, Agrium closed its US$2.65-billion takeover of UAP Holdings Inc., making it the largest distributor of seeds, fertiliser and other farm inputs in North America.
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