The planned plant will produce 315,000 tonnes a year (t/y) of ethylene dichloride (EDC), 500,000 t/y of caustic soda and 167,000 t/y of liquefied petroleum gas (LPG), with the products aimed chiefly at offtakers in Australia, China and India. ‘We are already negotiating supply agreements with two international offtakers,’ says Osama al-Khaja, head of corporate finance at KFH Bahrain.

The facility will also produce 1,000 MW of power, of which about 200 MW will be needed internally, and 30 million gallons a day (g/d) of water, of which about 4.5 million g/d will be used within the plant. KFH is in negotiations with both the government and potential private local buyers for the remaining output.

KFH is also in negotiations with both Manama and the private sector over a gas supply agreement. The facility will require about 255 million cubic feet a day of gas, which will come from Qatar or Iran. ‘We are talking to the government’s natural gas committee, which is discussing gas import options with Tehran and Doha, and we are also talking to a private upstream gas project about supplying our project,’ says Al-Khaja.

Studies into the power element of the project were carried out by the US’ General Electric (GE), which is also understood to be considering taking the unusual step of operating the power plant. The UK’s Weir Westgarthis the consultant on the desalination element, which will use multi-stage flash (MSF) technology.

The consulting arm of Stone & Webster, part of the US’ Shaw Group, advised on the petrochemicals portion of the scheme, in co-operation with Germany’s Uhdeand the US’ Chicago Bridge & Iron.

KFH will take a 10 per cent stake in the project and is talking to other financial and development institutions and to its three main advisers about taking equity stakes. Norton & Rosehas been appointed legal adviser. The scheme will be $900 million debt-funded, expected to be raised through a sukuk issue.

The application with the Industry Ministry was lodged in mid-September and is understood to request locating the project in Sitra, to take advantage of existing port facilities.

In the event of government approval, construction packages would be tendered in the first quarter of 2005, with completion scheduled for 2008.