Pakistan’s first coal-to-urea project planned as FFC signs $1.12bn FEED agreement with Chinese firm

Fauji Fertilizer Company has signed a Front-End Engineering Design (FEED) agreement with China’s Hualu Engineering and Technology Co. Ltd for a $1.12 billion coal-to-fertilizer project that the company says will be Pakistan’s first of its kind under the China-Pakistan Economic Corridor (CPEC) 2.0 framework.

FFC announced the development in a social media statement on Saturday, saying the agreement was signed in China on May 24, 2026.

The proposed plant is expected to produce 717,000 tons of urea annually while consuming around 2.1 million tons of indigenous coal each year, according to the company. Commercial operations are planned for 2030-31.

The project is expected to support domestic fertilizer availability while increasing the use of local energy resources as Pakistan attempts to reduce pressure from imported inputs and external financing costs.

FFC said the initiative reflects its focus on industrial expansion, resource optimization, and long-term economic growth.

The agreement comes amid renewed efforts by Pakistan to attract Chinese investment under the second phase of CPEC cooperation.

Pakistan and China recently agreed to deepen collaboration on the “high-quality development” of CPEC during Prime Minister Shehbaz Sharif’s visit to Beijing, according to a joint statement issued after the trip.

The two countries also reaffirmed support for wider participation in future CPEC projects as Islamabad seeks to expand industrial and infrastructure investment under the corridor’s next phase.