Fauji Fertilizer Company (FCC) is moving ahead with a proposed $1.12 billion coal-to-urea project under the CPEC 2.0 framework after signing a Front-End Engineering Design agreement with China’s Hualu Engineering and Technology Co. Ltd., Gwadar Pro reported quoting the company's statements.

FFC has described the project as Pakistan’s first coal-to-fertilizer venture. The proposed plant is expected to produce about 717,000 tonnes of urea annually and consume around 2.1 million tonnes of indigenous coal each year. Commercial operations are planned for 2030-31 or by 2031, according to reported company details.

The project would mark a shift for Pakistan’s fertilizer industry, which largely relies on natural gas as feedstock for ammonia and urea production.

Analysts say a coal gasification route could diversify the country’s fertilizer manufacturing base and reduce exposure to gas supply constraints.

Pakistan’s fertilizer sector is already largely self-sufficient in urea, but periodic supply gaps have required imports.

Analysts cited in regional media said the planned additional capacity could help bridge such shortfalls and, if domestic demand remains stable, may create room for exports.

Agriculture remains a major part of Pakistan’s economy, contributing roughly one-fifth to nearly a quarter of GDP and supporting a large share of employment and rural livelihoods. Pakistan produces around 6.5 million tonnes of urea annually, according to fertilizer sector data.

The project is expected to use local coal resources, including coal from Sindh’s Thar region, according to media reports citing company and analyst comments. However, the proposed plant site has not been clearly confirmed.

The agreement with Hualu comes as CPEC’s second phase places greater emphasis on industrial cooperation, manufacturing and technology transfer.

The scale of the project, its reliance on coal gasification and its financing structure will require further clarification as the proposal moves from engineering design toward implementation.

Credit: Independent News Pakistan (INP) — Pak-China