Qatar awards $610m fertilisers expansion deal

11 October 2009

Italian/South Korean group wins deal after direct negotiations

An Italian/South Korean consortium has won the $610m contract to expand the Qatar Fertiliser Company (Qafco) fertilisers complex at Mesaieed.

Qafco said on 11 October that Saipem, an Italian engineering firm, and South Korea’s Hyundai Engineering & Construction have been awarded the 35-month engineering, procurement, construction, and technology contract.

The consortium will develop the sixth phase of the complex, Qafco VI, which will produce 3.1 million tonnes a year (t/y) of granular urea, one of the most common types of fertiliser.

The companies are already working on the fifth phase of the complex, Qafco V, and the award of the latest contract comes after direct negotiations between Qafco and the consortium partners.

Sources close to the deal say that the direct award was aimed at speeding up the construction process and cutting costs on the development.

Qafco is keen to push ahead with the sixth project so it can use the ammonia produced by Qafco V as feedstock to make more urea, say contractors who had hoped to be considered for the scheme.

Saipem and Hyundai are already mobilised at the site which will cut six months to a year from the development process according to one engineering consultant based in the UAE.

When Qafco V is completed the Mesaieed site will have a production capacity of 3.8 million t/y of ammonia and 4.3 million t/y of urea, making the complex the largest of its kind in the world. The sixth phase will take Qafco’s production capacity to 7.4 million t/y of urea.

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