Citibank primed for aluminium smelter

28 February 2003
It is expected that Citibankwill be formally awarded the financial advisory mandate on the proposed 500,000-tonne-a-year aluminium smelter in Sohar by mid-March. Citibank has emerged as the clear frontrunner after intense competition from a number of international financial institutions. The final stage of the selection process became a two-horse race between Citibank and HSBC(MEED 21:2:03).

The financial advisory mandate is initially only for the smelter component of the project and does not include the captive power plant, although the possibility remains that the mandate will be expanded to cover the entire project at a later date (MEED 3:1:03).

The proposed project is expected to have a split shareholder structure, with Oman Oil Company (OOC)and Abu Dhabi Water & Electricity Authority (ADWEA) forming a joint venture company which will own and develop the 1,200-MW power plant. The same JV will join Canada's Alcanin the shareholder structure of the aluminium smelter.

A technical and marketing feasibility study, being carried out by Canada's SNC Lavalin, is due to be completed by June. The Sohar aluminium smelter has been under discussion since the mid-1990s and will run on feedstock from the central Oman gas fields.

The anticipated appointment of Citibank as financial adviser reaffirms the bank's strong position in Oman. Other big-ticket mandates won in the sultanate include the refinancing of the debt package for Oman LNGand the financial advisory on the government's proposed liquefied natural gas (LNG) train.

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