Fluor to build Ras al-Zour rolling mill in packages

21 September 2010

Saudi Arabian rolling mill project moving forward quickly says source

The US’ Fluor is preparing to proceed with an engineering, procurement, construction and management (EPCM) strategy for the $2.5bn aluminium rolling mill project at Ras al-Zour in Saudi Arabia.

Ras al-Zour complex
ProjectCapacity  (t/y)Budget
Alumina refinery1.8 million$2bn
Rolling mill250,000- 460,00$2.5bn
Bauxite mine2 million $200m
t/y=Tonnes a year. Source: MEED

An EPCM strategy using a series of construction and supply packages has emerged as the favoured method of executing the project due to the recent developments by the joint venture partners, the Saudi Arabian Mining Company (Maaden) and the US’ Alcoa. a source close to the project tells MEED.

In July MEED reported that a lump-sum turnkey strategy was also being considered (MEED 29:7:10).

“Fluor is still conducting a dual strategy at the moment, but the base case is definitely EPCM and that is what is in front of the bankers,” the source says. “The traditional approach in Saudi Arabia is the lump-sum turnkey method and that is being run in parallel as Maaden want to explore that, but that is not being presented to the bankers at this juncture.”

Maaden and Alcoa are moving forward with the rolling mill project. The partners have procured equipment for hot and cold mills, the coil coating line and preheat furnaces from Germany’s SMS Siemag and BWG Bergwerk and Austria’s Ebner respectively. The US’ Wagstaff will also provide the facility with ingot and billet casting systems.

The source also says that Maaden and Alcoa are looking to aggregate the commodities procurement across the whole $10.8bn complex to ensure that the construction phase runs smoothly.

“[The partners] are trying to set commodity price books and set prices,” the source says. “This means that when the construction contracts are awarded then both the supplier is set and the price is set. This will speed the process up considerably.”

The US’ Bechtel is currently in charge of the EPCM for the aluminium smelter at the complex and it is believed that the company will award up to 30 packages to cover its construction. However the source says that the rolling mill will not have as many due to it being smaller in scale.

The rolling mill is part of an aluminium complex and will have a capacity of up to 450,000 tonnes-a-year (t/y) when completed in the fourth quarter of 2013. The site will also include a 1.8 million t/y alumina refinery and a 740,000-t/y aluminium smelter, with a 4 million-t/y bauxite mine being built at Al-Baitha.

Maaden holds a 74.9 per cent stake in the aluminium complex, while Alcoa owns the remaining 25.1 per cent.

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