Construction work on the Sultanate’s first anhydrous liquid ammonia project is set to begin in earnest at a site adjoining the methanol plant of Salalah Methanol Company (SMC) in Salalah Free Zone in Dhofar Governorate.
It follows the issuance of the all-important ‘notice-to-proceed’ to the selected contractor, SNC-Lavalin, from Salalah Methanol Company, a wholly owned subsidiary of Oman Oil Company. The Canadian headquartered international engineering firm announced on Wednesday that it has received the nod to progress the Engineering, Procurement and Construction (EPC) phase of the estimated $750 million plant downstream of SMC’s methanol scheme.
SMC’s green light would effectively mean that it is in the final stages of achieving financial close on the funding of the ammonia project, representing another major triumph for the Oman Oil Group in securing its financing requirements from local and international banks for its multiple upstream, midstream and petrochemical investments.
Last month, the Group — the biggest investor in Oman’s energy and related sectors — signed financing pacts with local and international lenders for the debt component of the project finance for the $826 million Salalah LPG Extraction plant promoted by its Energy Infrastructure vertical headed by Oman Gas Company.
The Group also hopes to achieve financial close for its signature $7 billion Duqm Refinery project before the end of this year, before moving on to other ambitious schemes, notably a PTA plant in Sohar and a mammoth petrochemicals complex in Duqm SEZ.
The 1,000 metric tonnes per day (MTPD) capacity ammonia plant will be integrated with SMC’s 1 million tonnes per year (tpy) capacity methanol plant at the free zone. Besides being used as an ingredient in the production of fertilisers, ammonia is also an important intermediate chemical in the manufacture of synthetic resins (urea based), synthetic fibres (acrylics and nylons, and polyurethanes, among other applications.
Importantly, the new project will also add to bulk liquid volumes handled by Salalah Port at the new liquid jetty under development at the transshipment and logistics hub. Together with methanol product and liquefied petroleum gas (LPG) volumes, starting from 2020
SNC Lavalin said it had completed the early works phase in preparing for the key EPC phase. “SNC-Lavalin is pleased to enter into this next phase of the Salalah ammonia project, which is of great importance for SMC and the Sultanate of Oman”, said José J Suárez, President, Mining & Metallurgy, SNC-Lavalin.
“This project demonstrates that our strong expertise is recognized by clients and major financial institutions alike, and we are committed in offering our client and the region a world-class project that they are going to be proud of.”
“We are very excited about this opportunity to pursue our work with SMC,” added Etienne Cabanes, Senior Vice President, Europe, Middle-East and North Africa, Mining & Metallurgy. “We look forward to ensuring the successful execution of this project with the utmost care for quality, safety, environment and the community in Salalah.”
Conrad Prabhu
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