Observer Spotlight on Major Industrial & Economic Projects
MUSCAT -- Sohar International Urea & Chemical Industries (SIUCI), promoted by its Chairman, leading Omani businessman Shaikh Suhail Salem Bahwan, is already looking at more than doubling production capacity to create a truly global-scale fertiliser plant at Sohar.
Construction work on the first phase of SIUCI's ammonia and urea project, involving an investment of around $650 million, is under way at the Sohar Industrial Port. When operational in the second quarter of 2008, the state-of-the-art plant will produce 1.225 million tonnes of granular urea for the world markets.
But, according to a top official of the company, plans are on the anvil for a major second phase expansion of plant capacity. "The company would like to expand, in the near future, its annual urea production capacity from 1.225 million tonnes to about 3 million tonnes," said Suresh M Shivdasani, Managing Director, SIUCI.
Already, the project has notched up a number of significant achievements. It is one of the largest private sector green field fertilizer projects in the world. It also represents the largest industrial investment by an individual in the GCC, as well as the largest 100 per cent Omani private sector industrial investment.
Besides, the benefits accruing to the national economy and employment generation are substantial, say officials. SIUCI's fertilizer project will contribute to the strategic national objective of industrial diversification by reducing the country's dependence on oil revenues through gas based industrial development. Additionally, the project will generate considerable foreign exchange earnings as the entire urea output is targeted for export. A significant number of jobs will also be created, as will opportunities for business and related services.
Japan's Mitsubishi Heavy Industries, which has been awarded the contract to build the plant on an engineering-procurement-construction (EPC) basis, has commenced work on the project in the second quarter of this year. Basic engineering has been completed and detailed engineering and procurement are in progress. Some 200 people are currently working on and off site and deployment at the site alone is expected to rise to 2,600 when construction work is at its peak.
SIUCI's ammonia and urea plant will employ the state-of-the-art process technologies of Haldor Topsoe (Denmark) for ammonia, Snamprogetti (Italy) for urea synthesis, Yara Fertiliser Technology (Belgium) for urea granulation and UOP Benfield (USA) for CO2 removal. All of these represent well proven technologies for the manufacture of ammonia and urea, say SIUCI officials. Natural gas, as feedstock for the project, will be provided by the Omani Government.
The entire output of the finished product, granular urea, will be sold under a "take-or-pay" Offtake Agreement with Transammonia Inc. USA, the largest urea marketing company in the world. SIUCI is also moving rapidly to train Omanis in the operation of the plant. The company is set to achieve 35 per cent Omanisation at the time of commercial operation, which will gradually increase to 50 per cent when the second phase comes on stream around the year 2010.
In addition to administrative, commercial and finance functions, Omani citizens will be fully involved in the technical operation of the plant. To start with, 70 Omani citizens are being recruited for technical jobs, all of whom will attend a two-year training programme designed in consultation with the Ministry of Manpower. The training programme involves extensive classroom, laboratory and workshop training by global technical specialists to ensure that the skills of the Omani technical staff fully meet the project's operational requirements.
By Conrad Prabhu
© Oman Daily Observer 2005
