Decision time approaches for Sohar smelter

10 October 2003
A final investment decision on the proposed Sohar aluminium smelter project is now expected to be taken by the end of the year. The decision had been due in September, but was delayed by Canada's Alcan - the prospective technology and marketing partner on the smelter - making a bid for France's Pechiney. Alcan, which received French regulatory clearance in early October for the Pechiney takeover, has been given a late November deadline by the Sohar project promoters to commit to the scheme (MEED 15:8:03, Cover Story).

The two other planned shareholders on the project, Oman Oil Company (OOC)and Abu Dhabi Water & Electricity Authority (ADWEA), say that the project will go ahead with or without Alcan's participation. However, it is also understood that the companies have commissioned a new detailed feasibility study from Canada's SNC Lavalin to look into a smaller project, covering a 330,000-tonne-a-year (t/y) smelter with a 600-MW captive power plant. If the smaller option is pursued, then Alcan could still participate as a technology supplier, even if it decides against putting equity in. The original plan called for the construction of a 500,000-t/y smelter and a 1,100-MW power plant at a total cost of $2,100 million.

Once the investment decision is taken, the project promoters are looking to move ahead with the scheme quickly. Discussions have already taken place with engineering, procurement and construction (EPC) contractors, in anticipation of the EPC tender being issued in the first quarter of 2004.

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