SMS Meer partners Petrofac Emirates for Abu Dhabi steel plant

13 September 2011

German technology provider teams up with local joint venture

SMS Meer has partnered with Petrofac Emirates to bid for the third phase of the Emirates Steel Industries (ESI) phase three expansion at Mussafah in Abu Dhabi.

ESI launched the invitation to bid (ITB) for the 1.4 million tonne-a-year (t/y) flat steel plant on 28 July.

The tender was sent out to technology providers, who will bid jointly with a chosen engineering, procurement and construction (EPC) contractor. The technology providers are Italy’s Danieli, Japan’s Mitsubishi, Siemens Vai and SMS Meer, both of Germany, Japan’s Steel Plantech and Italy’s Tenova.

SMS Meer has chosen to partner EPC contractor Petrofac Emirates, a joint venture of local oilfield services provider and EPC company Petrofac and the Abu Dhabi-owned investment company Mubadala.

Insiders say the tie-up with a partner part-owned by Abu Dhabi will give SMS Meer a competitive advantage in the bidding process. ESI is owned by the General Holding Corporation (GHC), a government entity promoting industrial development in the emirate.

Bids are likely to be submitted by the end of October. The contract for the purchase of the technology and the construction of the plant is expected by January 2012.

A request for proposal sent out to banks puts the value of the project at between $800m and $1bn.

Prospective bidders were long left in the dark about the location of the project, as ESI stalled on its decision over whether to build the plant in Mussafah, or in the Khalifa Industrial Zone Abu Dhabi (Kizad), the new industrial park in Taweelah. In the end, ESI decided to place the new plant next to the existing phase one and two facilities in Mussafah’s Industrial City of Abu Dhabi (ICAD).

More recently, the future of the project was questioned by industry sources when the company’s chief executive officer Gregor Munstermann announced his departure. Munstermann left ESI at the end of August.

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