Fertilizer Factory in Mato Grosso do Sul Becomes Part of Petrobras Plan Implementation Portfolio

Petrobras' Board of Directors has approved the continuation of the implementation of the Nitrogen Fertilizer Unit (UFN-III), located in Três Lagoas (MS). The decision is based on a careful reassessment of the project which, in light of the premises of the 2024-2028 Strategic Plan (PE 2024-2028), had its economic attractiveness confirmed for this phase in the different scenarios foreseen in Petrobras' investment project approval system, including with a positive NPV in the most challenging scenario.

The unit had been hibernated since 2015 and the project reassessment process began last year, due to the approval of the company's return to the fertilizer segment, in line with the strategic guidelines approved within the scope of PE 2024-2028.

With the decision, the project becomes part of the portfolio under implementation of the current Strategic Plan and Petrobras will begin the contracting processes to resume construction of the unit. The estimated investment for completion of UFN-III is approximately R$3.5 billion, and operations are expected to begin in 2028.

Contracts will undergo all necessary analyses, in compliance with governance practices and applicable internal procedures. Final authorization will still be submitted for approval by the competent authorities at Petrobras, which will allow the signing of contracts to resume construction.

“The fertilizer sector is strategically important to Petrobras. We are resuming investments in this segment, based on technical and economic feasibility studies, with the aim of expanding our gas market and helping to reduce dependence on fertilizer imports in Brazil,” says Petrobras CEO Magda Chambriard.

According to Petrobras Industrial Processes Director William França, “with the increased supply of products generated at UFN-III and its privileged location, close to the main consumers in the Midwest, South and Southeast, we are confident of the importance of the unit for the region and the country.”

About the UFN-III Project
The UFN III project foresees the annual production of approximately 1.2 million tons of urea and 70 thousand tons of ammonia. The unit is located close to the main consumer markets for these products and will mainly serve the states of Mato Grosso, Mato Grosso do Sul, Goiás, Paraná and São Paulo. The strategic location provides greater reliability in relation to the supply alternatives for this market, whose demand for urea fertilizer shows a growing trend.

In addition, the project features modern equipment and technologies in fertilizer production, resulting in high plant efficiency.

Ammonia is a raw material for the production of fertilizers and petrochemicals, as well as other agricultural products; and urea is the most widely used nitrogen fertilizer in Brazil, with national demand estimated at around 7 million tons by 2024, currently entirely imported. Corn is the main crop for urea fertilizer demand in Brazil, but the product is also used in the cultivation of sugarcane, coffee, wheat and cotton, among others. Urea will also be used in the livestock segment, used as a feed supplement for ruminant animals.