OMAN - The Sohar Fertiliser Project.

Oman's second fertiliser plant will be built in Sohar. This is a private venture for the local Bahwan Trading Co. and the company being formed to run the plant is Sohar Int'l Urea & Chemical Industries. James Chemical Engineering is the technical adviser. Bahwan has shortlisted three consultancy firms for the contract to provide project management services.

The plant will have a capacity of 2,000 t/d of ammonia and 3,500 t/d of urea. The formal signing of an agreement is expected shortly for the government to supply 700,000 MCF of gas feedstock over the 25-year life of the plant.

The bidders for the EPC contract, to be awarded in April 2002, are Krupp Uhde, SnamProgetti with Mitsubishi Heavy Industries, and Toyo Engineering Corp.

The venture will cost up to $580m. Debt financing will account for 70% of the investment, two-thirds of which will be covered by export credit agencies and the other third by commercial banks. HSBC Investment Bank is the financial adviser. A syndication will begin soon after the EPC contractor has been chosen.

There is no firm offtake agreement in place for the plant's output as yet. Bahwan is said to be in advanced negotiations with two large US firms to take 100% of the urea output. Start-up is planned for the end of 2005.

The Aluminium Project: Promoted since 1996 to be built at Sohar, the proposed aluminium smelter, to cost about $2.5 bn, has been re-studied on the basis of a 30-amp design. The first part of a pre-feasibility study for this was completed in late 1999. A second, more detailed study on the project's marketing and technical aspects has since been done.

The project now is to be implemented in two phases. Its full capacity of 530,000 t/y will require a 900 MW power plant which is expected to consume over 525 MCF/day of gas.

A steering committee to oversee the project's implementation was established in early 2000. Its members include representatives from the Omani government and OOC, Dubai Aluminium (which has developed its own cell-reduction technology with Comalco of Australia and would provide this to the Omani project), and five prospective shareholders: SNC Lavalin of Canada, Kellogg Brown & Root of the US (a prospective project manager), WJ Towell and National Trading Co. of Oman, and National Power of the UK. It was reported in early 2000 that Abu Dhabi was also participating in the steering committee's work.

When the project's final go-ahead is given, work on the smelter's front-end engineering and design (FEED) would begin within the next six months. The EPC contract would be awarded within the following six to nine months. The smelter will be operated by Sohar Aluminium Smelter Co. (Sasco).

The Sohar industrial zone is being developed for the Public Establishment for Industrial Estates. It will have terminal facilities for fertilisers, and aluminium.