Russia's EuroChem moves decisively, targets Rs 20,000 crore held in 16 Italian banks

New Delhi/Moscow: In a dramatic escalation that could rattle global fertilizer supplies and send shockwaves through European banking circles, Russian chemical major EuroChem has asked 16 top Italian banks including giants like Intesa Sanpaolo, UniCredit, BNP Paribas Italy, and Monte dei Paschi to immediately freeze all payments to Italian engineering firm Tecnimont and its Russian arm MT Russiya LLC. The amount in question? A staggering Rs 20,270 crore (202.7 billion rubles), one of the largest commercial disputes between a Russian and a European company since the Ukraine war began.

At the heart of the battle is the EuroChem North-West-2 ammonia and urea mega-plant in Kingisepp, near St. Petersburg – project that was supposed to make Russia one of the world’s top exporters of nitrogen fertilizers, the lifeblood of Indian farmers who use millions of tonnes of urea every year.

What went wrong?

In 2020, EuroChem awarded the Rs 15,000+ crore contract to Milan-headquartered Tecnimont S.p.A. (part of Maire Group) on a fixed-price, fixed-deadline basis. The plant was to be ready by September 2023. The Italian holding Maire S.p.A. itself gave parent guarantees. Then came May 2022. Just months after Western sanctions were imposed on Russia, Tecnimont suddenly halted work, citing EU restrictions. EuroChem calls it a “unilateral and illegal walkout”. The Italians say sanctions left them no choice.

The Moscow Arbitration Court didn’t buy the sanctions excuse. It has already frozen 9.5 billion rubles of Tecnimont’s assets in Russia and is hearing the main claim of 202.7 billion rubles. A parallel case against parent Maire S.p.A. for nearly the same amount is on in St. Petersburg.

Now EuroChem has gone nuclear: letters to 16 Italian banks warning them that any payment to Tecnimont or MT Russiya could be money that rightfully belongs to EuroChem once courts rule. The company wants every euro in those accounts locked until the cases are decided.
“Any bank that keeps paying Tecnimont is taking a huge risk,” EuroChem’s statement reads between the lines.

Why Indian farmers should care

When completed, the Kingisepp plant was to pump an extra 1 million tonnes of ammonia and 1.4 million tonnes of urea into the global market every year. That’s roughly 5–6% of India’s annual urea imports. World Bank economist John Baffes recently warned that fertilizer prices, though down from 2022 peaks, are still 50–80% higher than pre-pandemic levels. Any delay in new Russian capacity keeps prices elevated — and eventually hits the Indian farmer’s pocket and the government’s fertilizer subsidy bill (already over Rs 2 lakh crore last year).

The Italian banks on EuroChem’s freeze list
• Intesa Sanpaolo
• UniCredit
• BNP Paribas Italy
• Banco BPM
• Monte dei Paschi di Siena
• Crédit Agricole CIB
• BPER Banca
and nine others.
For now, Italian banks are tight-lipped. But with Russian courts already seizing assets and EuroChem threatening enforcement “in various jurisdictions”, the message is clear: pay Tecnimont at your own peril.
As one Moscow-based lawyer following the case told News9, “This is corporate warfare on steroids. EuroChem is making sure the Italians can’t spirit money away before Russian courts deliver the final blow.”
The Kingisepp plant remains half-built — a Rs 20,000-crore ghost rising on the Baltic coast, while lawyers in Moscow, St. Petersburg, and possibly Milan fight over who pays for the sanctions fallout.
For Indian agriculture, already battling high DAP and urea prices, every month this plant stays delayed is another month of pain. The fertiliser wars just got hotter.