Uhde wins Sohar fertiliser contract

06 December 2002

Germany's Uhdewas selected on 30 November as the preferred bidder for the contract to build the fertiliser complex for Sohar International Urea & Chemical Industries (SIUCI). Two other groups were competing for the engineering, procurement and construction (EPC) contract: Japan's Toyo Engineering Corporation, and a consortium of Italy's Snamprogettiwith Japan's Mitsubishi Heavy Industries. Uhde is understood to have submitted the lowest price at under $550 million (MEED 27:9:02; 30:8:02).

The scope of work involves the construction of a plant with capacity to produce 3,500 tonnes a day (t/d) of urea, from ammonia output of 2,000 t/d. Stamicarbonof the Netherlands is the licensor for the urea plant, while the granulation unit will be based on technology supplied by Belgium-based Hydro Fertiliser Technology. Front-end engineering and design (FEED) studies were completed by Jacobs Engineeringof the US. Construction is scheduled to take 35 months.

The next stage in the project's implementation is to secure financing. HSBC is advising SIUCI on the deal, which will be covered by the German export credit agency Hermes. The estimated $600 million debt package will be structured 70:30 between export credits and a commercial loan. Prospective arranging banks expect to receive the preliminary information memorandum in December, with financial close scheduled for the first half of 2003.

SIUCI has agreed terms with the Ministry of Oil & Gas for the supply of 700,000 million cubic feet of gas feedstock over 25 years via the Sohar-Fahud pipeline. The client, which is a wholly owned subsidiary of the local Bahwan Trading Company, will operate and manage the plant. The first consignments of fertiliser are due to leave the export berth at Sohar in 2005. Transammoniaof the US signed in April an offtake for the plant's entire urea output, while most of the excess ammonia will be marketed in the Indian subcontinent (MEED 19:4:02).

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