30 July 1999

IF some of the momentum behind Oman's diversification drive has been lacking over the last year, the imminent bidding on two major gas pipelines should restore confidence that its ambitious gas-led industrial projects are finally starting to take shape.

Engineering, procurement and construction (EPC) bids are due to be submitted in mid-October for the 305-kilometre, 32-inch-diameter line between Fahud and Sohar and a 700-kilometre, 24-inch line from Saih Nihayda to Salalah. Oman Gas Company has invited eight international groups to bid for both of the projects, but they will be awarded to separate groups. Those invited are a consortium of Italy's Snamprogetti, with Athens-based Consolidated Contractors International Company (CCC); Argentina's Techint; France's Entrepose; the German arm of France's Technip, with Athens-based Joannou & Paraskevaides (J&P - Overseas); Bechtel of the US; Dodsal of India; the US' Willbros, with Japan's Itochu Corporation; and two South Korean groups - Daewoo Corporation, with SK Engineering, and Hyundai Engineering & Construction Company, with LG Engineering. Both pipelines are due to be completed by 2001.

Muscat revives

The appointment of advisers on a build-own-operate-transfer (BOOT) wastewater project at Muscat has been taken as a sign that the long-standing project may also finally be coming to fruition. A consortium led by the local Galfar Engineering & Contracting, with the UK/US joint venture Ogden Yorkshire, Australia's Auscon Consultants International and BankMuscat, is the preferred bidder.

The UK's Weir Westgarth is to install new capacity at a desalination plant at Ghubrah and the award of a turnkey construction contract for a water supply scheme at Masarrat is expected before the end of the year. The UK's Mott MacDonald is the consultant. A similar scheme at Sharqiyah, involving construction of two well fields, a 97-kilometre transmission line and associated facilities, should also go to tender this year. A consortium of Oman Engineering Consultancy, Egypt's Mohammed Abdel Warith Engineering and France's BEICIP is consultant.

Bids are due in August for dredging and reclamation work at Sohar port. Thirteen groups are understood to have prequalified for the work, which involves dredging 19 million cubic metres and using the dredged material for various land reclamation projects planned at Sohar. South Korea's Daewoo is to construct five-six kilometres of breakwater at the port.

Project sponsors are optimistic that a planned 480,000-tonne-a-year (t/y) aluminium smelter at Sohar will be given the green light this year. Dubai Aluminium is understood to have committed to becoming the main investor in the project, which will also provide 300-400 MW of power. The consortium includes National Power and Brown & Root, both of the UK, Canada's SNC Lavalin International and the local WJ Towell. Movement on this project would boost plans for a petrochemicals complex at Sohar, which will produce 450,000 t/y of ethylene and 450,000 t/y of polyethylene. BP Chemicals is the major foreign investor.

The government is continuing efforts to save a $1,100 million fertiliser project planned for Sur. A key Indian sponsor, Rashtriya Chemicals & Fertilisers, signalled its possible withdrawal from the venture earlier in the year, citing the slump in fertiliser prices. However, talks are continuing with the Indian government and other Indian investors about rescuing the project which would produce 1.4 million t/y of urea and 330,000 t/y of ammonia. Indian fertiliser authorities are studying a proposal to restructure the financial terms of the venture, under which the Indian government would provide price guarantees for the urea.

Salalah Port Services (SPS) has now completed construction of its four berths at Salalah Port two months ahead of schedule and is set to capture 25 per cent of Gulf trans-shipment business this year. Additional berths are likely to be added if demand reaches expectations. SPS will also form a new company to manage a free zone planned at Salalah. Dry docks, fuel bunkering facilities and a new oil refinery are also being considered for the southern port city.

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