Gulf United Steel Holding Company’s (Foulath’s) plans for three new pelletising plants totalling $2bn in Oman and Egypt have still not been finalised, according to a source familiar with the projects.

The plants, two of which will be in Egypt, with the other in Oman, will use the same technology as the 6 million tonnes-a-year (t/y) facility that Foulath inaugurated in late April in Bahrain.

Speaking at the inauguration ceremony for the Bahrain plant, the source said no deal was yet in place with Kobe Steel regarding directly awarding the Japanese contractor engineering, procurement and construction (EPC) contracts for the three new plants, due to a number of unresolved issues in Oman and Egypt.    

“There could be a delay for the EPC contracts for the pelletising plants in Egypt and Oman,” the source says. “The reason is the great bureaucracy involved in planning projects like this, especially in Egypt.”

The budget for each plant, which will produce iron pellets essential for making steel, is between $650m-700m. Foulath was in direct talks with Kobe Steel regarding the EPC contractor doing a ‘copy-and-paste’ job for each plant based on the Bahrain facility. The source believes Kobe is still the odds-on favourites to secure the deal (MEED 02:03:2010).  

“I’d be surprised if it went out to tender,” the source says. “Kobe must still be very confident.”

The plant in Oman will be located at Salalah and is a joint venture between Foulath and Japan’s JFE Steel Corporation. No locations have been agreed for the two plants in Egypt.

The $700m pelletising plant in Bahrain is the largest of its kind in the world and is located at the Hidd Industrial area of Salman Industrial City in the kingdom. A stainless steel mill with the capacity to produce 100,000-t/y of cold rolled stainless steel was also inaugurated.

Kuwait’s Gulf Investment Corporation (GIC) owns 50 per cent of Foulath, with Qatar Steel owning 25 per cent, 10 per cent each by the Kharafi Group of Kuwait and the National Industries Group of Kuwait, and 5 per cent by the Kuwait Foundry Company.