Galfar Engineering has won a $62m contract for the construction and partial procurement for Salalah Methanol Company’s Luban Ammonia plant project, according to sources.

MEED reported in early March that Canadian engineering firm SNC-Lavalin won an estimated $660m engineering, procurement and construction contract for the 1,000-tonne-a-day plant in the southern Omani port city of Salalah.

Galfar is understood to have signed a two-year contract for the project. SNC Lavalin’s scope includes the rest of the procurement and the entire engineering work. The Montreal-based firm is expected to initiate early works on the project this month.

The project has yet to reach financial close, which is anticipated in June 2017.

The Luban facility will produce ammonia using a feedstock of hydrogen purge gas from the nearby methanol plant, operated by SMC.

The Salalah chemicals project is part of the sultanate’s efforts to develop its downstream sector at ports such as Duqm and Sohar.