Maaden awards Daelim Industrial $824m ammonia contract

15 July 2013

South Korean firm awarded first package at $7bn phosphates city in the north of Saudi Arabia

Saudi Arabian Mining Company (Maaden) has awarded South Korea’s Daelim Industrial the $824m contract for the ammonia plant contract at its proposed $6.93bn phosphates city at Waad al-Shammal in the north of Saudi Arabia.

Daelim Industrial will carry out the engineering, procurement and construction for the plant, which will have a capacity of 1.1 million tonnes a year when it is completed in late 2016. The contract is split into out-of-kingdom (OOK) and in-kingdom (IK), meaning much of the design work can be carried out at Daelim Industrial’s headquarters in Seoul.

“Daelim have a good track record in the kingdom, but this was an all Korean bid list and the pricing is as aggressive as it gets,” says an EPC contracting source based in Saudi Arabia. “Maaden and its partners will be happy with that bid price.”

MEED reported in April that four South Korean contractors had submitted bids for the package and that the technology being used for the plant will be provided by Germany’s ThyssenKrupp Uhde.

The US’ Jacobs Engineering is responsible for the front-end engineering and design (feed) and the US’ Fluor is carrying out the project management consultancy for the technical packages, worth a total of about $4bn, at the city. Fluor is carrying out the project management consultancy (PMC).

The city is being built so Maaden can fully utilise the phosphates from its Al-Khabra mine.

In March, Maaden signed an agreement with Saudi Basic Industries Corporation (Sabic) and the US’ Mosaic that will see the companies come in as partners. Under the terms of the deal, Maaden retains a 60 per cent stake, while Mosaic will have a 25 per cent share and Sabic will take the remaining 15 per cent. 

The scope of works for the city will include a mining component, as well as eight different processing plants, and a utilities and offsites package. The phosphate produced at Al-Khabra is low in heavy metal content and thus ideal to be used for food production, as well as fertiliser and animal feed. The measured reserves of the Al-Khabra deposit are estimated to be 236 million tonnes.

Riyadh also plans to use the city as a catalyst for the economic development of the area. Waad al-Shamal will become the major phosphates hub in the kingdom and a major downstream phosphates cluster for attracting international companies is also planned for the area.

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