India's Minister of Chemicals and Fertilisers, Sukhdev Singh Dhindsa, has urged the Omani government to invest in India, especially in the chemical and hydrocarbon sectors.
He was speaking at the unveiling of the foundation stone for the $969 million Oman India Fertiliser Co (Omifco) at Qalhat in Sur, about 350 kilometres from Muscat, on Wednesday.
The Indian minister said that the venture in Qalhat reflected India's desire to pursue closer political, strategic and economic links with Oman.
"This is the first and only overseas venture so far, wherein the Indian government has made a long-term commitment to purchase the entire urea produced from a plant, in this case, for a 15-year period," he said.
This joint venture is believed to be the largest investment by India in a single project abroad.
The project is expected to benefit both India and Oman as it will provide India with a reliable and long-term source of urea to meet its huge demand. For Oman, India offers a permanent market for the entire production of the proposed venture.
According to Oman's Commerce and Industry Minister Maqbool bin Ali Sultan the joint venture would be beneficial to the economy.
"It will help speed up the diversification programme of the Omani government, besides providing employment opportunities for Omanis."
The fertiliser company, which will set up two identical fertiliser plants, will produce 1.65 million tonnes of granulated urea and 0.25 million tonnes of surplus ammonia per annum.
Oman Oil Co (OOC) holds a 50 per cent stake, while two Indian companies Indian Farmers Fertiliser Co-operative (Iffco) and Krishak Bharati Co-operative Limited (Kribhco), share the balance.
The plant will be built by Snamprogetti of Italy and Technip of France under a lump sum turnkey contract and is expected to start commercial production by the third quarter of 2005.
The complex will be self-sufficient with facilities necessary to meet its power, water, storage, ship loading and other requirements.
Technology suppliers are Haldor Topsoe of Denmark, Snamprogetti and Hydro-Agri.
The plant will be a nitrogen fertiliser unit consisting of two identical trains for the production of urea and ammonia.
Natural gas up to four million cubic metres per day is to be supplied by the Ministry of Oil and Gas under a long-term agreement.
Under other agreements, the Indian government and Iffco would buy the entire urea and surplus ammonia production at a pre-agreed price for 15 years and 10 years respectively.
The funding requirements of the project cost are being met by $320 million equity and $649 million of debt. The lead arrangers BNP Paribas, ANZ Investment Bank and Arab Banking Corp along with 19 other banks, are providing a $677 million syndicated loan. Gulf News
