KARACHI: Pakistan plans to establish its first coal-based fertilizer plant under the China-Pakistan Economic Corridor (CPEC), a $1.12 billion project that analysts say could strengthen fertilizer security and eventually turn the country into a net exporter of urea.
The facility will be developed by Pakistan’s largest fertilizer producer, Fauji Fertilizer Company (FFC), under the second phase of the Chinese-backed infrastructure initiative. The plant is expected to begin operations by 2031 and produce 717,000 tons of urea annually.
FFC recently signed a Front-End Engineering Design (FEED) agreement with China’s Hualu Engineering and Technology Co. Ltd. for what it described as Pakistan’s first coal-to-fertilizer project.
In a statement, the company said the plant would consume around 2.1 million tons of locally mined coal each year, helping reduce reliance on imported energy sources while supporting industrial growth and fertilizer security.
The project marks Pakistan’s first use of coal gasification technology for fertilizer production. At present, the country’s fertilizer industry relies primarily on natural gas as feedstock.
Industry analysts said the project could diversify Pakistan’s fertilizer supply chain and strengthen long-term food security.
Pakistan currently produces about 6.5 million tons of urea annually, while agriculture accounts for nearly 23 percent of the country’s gross domestic product.
Analysts noted that existing fertilizer manufacturers, including FFC, continue to depend on natural gas for ammonia and urea production. The new facility will be the first in the country to use coal gasification technology for the purpose.
Experts said the additional annual capacity of 717,000 tons could eliminate periodic supply shortages and create a production surplus, allowing Pakistan to export urea in the future.
Market analysts estimate domestic urea demand has remained relatively stable at between 6.2 million and 6.5 million tons annually over the past several years, suggesting much of the new plant’s output could be directed toward export markets.
The facility is expected to be built near the Thar coalfields in Sindh, where Pakistan’s largest coal reserves are located. Analysts say proximity to the coal source would significantly reduce transportation costs and improve the project’s commercial viability.
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If completed on schedule, the plant would represent a major milestone in Pakistan’s efforts to utilize indigenous resources, expand industrial capacity, and boost agricultural productivity.
