GPIC close to securing gas for $1.7bn expansion

22 April 2014

Bahrain-based fertiliser producer Gulf Petrochemicals Industry Company is expected to sign a feedstock contract

Gulf Petrochemicals Industry Company (GPIC) is on the verge of securing a gas allocation from the Bahrain government, which would allow it to move ahead with its planned $1.7bn expansion at its complex at Sitra.

Speaking at the sidelines of the MEED Bahrain Energy 2014 Forum in Manama, a senior executive from the region’s fertiliser industry said the project could release a tender for the construction contracts by the end of 2014.

The new plant would produce 3,600 tonnes a day (t/d) of ammonia, which would be used to produce 3,200 t/d of urea. The gas feedstock required would cost $2.50 a million BTUs, which would be guaranteed for the first three years of operations.

The scope of works for the project is:

  • Ammonia plant
  • Urea  plant
  • Offsites and utilities.

The technology providers will be Germany’s Uhde and Italy’s Snamprogetti. The UK’s Mott McDonald is carrying out a utilities study for the site. The financing of the deal will be on a 70:30 debt equity basis.

Tenders for the engineering, procurement and construction of the scheme could be sent out within seven months, depending on when all studies are completed.

Speaking at the MEED Bahrain Energy 2014 conference Fadhel al-Ansari general manager of manufacturing for GPIC outlined why the project is important for the kingdom.

“If we can secure the gas we will move this year and expect to start operations by 2018,” he told delegates. “It is profitable and it is an important project for Bahrain and will bring $227m per annum into the [Bahraini] economy.”

GPIC is owned by Bahrain’s National Oil and Gas Authority (Noga), Saudi Basic Industries Corporation (Sabic) and Kuwait’s Petrochemical Industries Company (PIC). The current facilities produce just under 700,000 tonnes a year (t/y) of urea.

Sheikh Mohamad bin Khalifa al-Khalifa, CEO of Noga, did not confirm the gas allocation had been awarded, but the official did tell conference delegates that GPIC was keen to expand operations.

“GPIC has a lot of goodwill with our fellow GCC investors Sabic and PIC of Kuwait,” he said. “This is a good joint venture with our regional partners and they also very keen to expand.”

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