Doha - The Heir Apparent H H Sheikh Tamim bin Hamad Al Thani yesterday laid the foundation stone for the $ 3.2 bn Qafco-5 and $ 320m Qatar Melamine Project in Mesaieed Industrial City.
The construction of the Qafco-5 project will take 38 months and the completed project is expected to be handed over in 2011, while the Melamine Project is slated for start-up in the third quarter of next year.
The Qafco-5 project, once implemented, will make the Qatar Fertilizer Company (Qafco) the world's largest single site producer of urea and ammonia.
With a daily production capacity of 4,600 tonnes of ammonia and 3,850 metric tonnes (MTPD) of urea, Qafco-5 will boost the company's annual ammonia output by 73 percent to 3.8 million tonnes and urea production by 43 percent to 4.3 million tonnes per annum.
The cost of the project will be partially covered by bank loans in the range of $ 1.6bn including $ 500m as a revolving facility. The remaining $1.6bn will come from Qafco's existing reserves and cash flow generated form its operations.
Late last year, an agreement was reached with a number of international, Middle Eastern and national banks for the project financing. Italy's export credit agency, SACE has also been selected to participate in financing Qafco-5 project.
The Engineering, Procurement and Construction (EPC) Contract for the Qafco-5 project was awarded to a consortium comprising Snamprogetti of Italy and South Korea's Hyundai Engineering and Construction Company.
While Snamprogetti will be responsible for engineering and procurement, Hyundai will be dealing with the construction of the complex.
Pointing to the significance of the project, Qafco Chairman Abdullah Salatt said: "Increasing worldwide demand for our products encouraged us to add the Qafco-5 train to our existing facilities." "The project will put Qatar in a significant position on the world's food map with the ever increasing demand for fertilizers."
In fact, encouraged by favourable fertilizer markets, fuelled by rising gas prices and growing demand for food worldwide, Qafco shareholders Industries Qatar (IQ) with 75 percent stake and Norwegian Yara International with 25 percent decided to set up a fifth production line (Qafco-5).
Deputy Premier and Minister of Energy and Industry, H E Abdullah bin Hamad Al Attiyah told reporters that Qatar is currently exporting urea to over 40 countries worldwide.
By Nasser Al Harthy
© The Peninsula 2008
