Engro Retrofit & Expansion

completed

- 2 - Environmental Review Summary (ERS)Project Name: Pakistan-Engro Retrofit/Expansion ProjectRegion: AsiaSector: PetrochemicalProject No.: 0075541. Engro, formerly Exxon Chemical Pakistan, is Pakistan’s second largest producer of urea fertilizer, with a 23% share of the local market. The company’s original manufacturing plant, which was built in the 1960’s by Exxon USA, has a production capacity of 268,000 mtpy of urea. In 1991 IFC helped Engro finance an expansion and debottlenecking project to increase the urea production capacity to 600,000 mtpy. This project was completed successfully in 1993. Since 1993 Engro has completed a further debottlenecking from 600,000 to 750,000 mtpy. Engro is 28% owned by employees and management, 28% by the general public and 44% by local and foreign financial institutions including IFC, which currently holds just under 10%. The proposed project involves retrofitting and expansion, from 750,000 to 850,000 mtpy of Engro’s existing urea production facility at Daharki, Sindh Province.2. This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of review of environmental documentation prepared by Engro and by site inspections by IFC’s Chemicals, Petrochemicals and Fertilizers Department staff. The following potential environmental, health and safety impacts were analyzed:· site location;· air emissions;· liquid effluent treatment;· solid waste;· HAZOP study and safety audit;· training and emergency response; and· occupational health and safety policies.Information provided on how these potential impacts are addressed in the Engro project is summarized in the paragraphs that follow.3. The retrofit and expansion is of Engro’s existing production facility, and no extra land acquisition will be necessary. There will be no extra constraints on the local infrastructure except for an expected 13 % increase in product output. The increase in output will, to the extent possible, be exported by rail or otherwise by truck.4. The facility is already in compliance with relevant air emission standards and air emissions from the facility will be reduced as a result of the retrofitting and use of new technology. The air emissions will be reduced by 36 % after completion of the project.5. The liquid effluent from the process plant will be reduced from approximately 800 GPM to 640 GPM ( a 20 % reduction) and ammonia and sulfate concentrations in the effluent will be reduced to comply with local regulations and World Bank guidelines. The reductions will be possible through introduction of condensate stream recycling from a high pressure hydrolyzer/stripper and from the ammonia plant.6. There will not be any significant changes in generation of solid waste. Solid waste will continue to be disposed of at a suitable facility according to local regulations.7. Current noise levels in surrounding communities are kept at 50 dB(A) during day and 45 dB(A) during night. There will be no increase in noise emissions due to the retrofit and expansion project.8. A formal HAZOP study will be carried out for the process changes. Recommendations from the HAZOP study will be incorporated in the design to achieve optimal safety. A large ammonia release audit has been carried out by Exxon specialists to assess the potential of risk and to recommend improvements to make the facility safe. The audit revealed no major concern and all recommendations from the audit have been implemented.9. The training and emergency response programs include environmental awareness and responsibility training, safety orientation on employment, and ongoing class room training including basic safety, emergency response, PPE, work permit systems, etc.10. IFC will ensure ongoing compliance with World Bank environmental, health and safety policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by Engro, and by conducting periodic supervision.11. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Engro’s proposed project will meet World Bank environmental, health and safety policies and guidelines, and host country requirements.