Sohar Aluminium to contribute 2pc to Oman’s GDP

Source: 3/23/2005, Location: Middle East

MUSCAT — Sohar Aluminium, a multi-billion dollar greenfield aluminium smelter project under development near the Sohar Industrial Port, is expected to contribute more than two per cent to Oman's GDP after start up, according to the company's CEO. Delivering the keynote address at the opening of the 3rd International Aluminium & Power Conference here yesterday, Anthony Kinsman said the project will have significant socio-economic benefits for the Sultanate, notably in the area of employment generation.

Roughly 35 per cent of the estimated 1,000 direct jobs envisaged at start-up will be set aside for Omanis - a figure set to rise to 60 per cent of the workforce after five years. In addition, some 4,000 indirect jobs will be created as a result of the project. Also, during the construction phase alone, an estimated 5,000-6,000 jobs will be created with a target local content of 35 per cent, he added.

Engineer Ahmed al Dheeb, Commerce & Industry Under-Secretary at the Ministry of Commerce & Industry, presided at the opening of the two-day international conference, which has been organised by Metal Events. Representatives of leading industrial, financial and contracting houses serving the smelting and power generation sectors, are attending the meet.

The state-owned Oman Oil Company (OOC) and Abu Dhabi Water & Electricity Authority (ADWEA) each own a 40 per cent share in Sohar Aluminium, with Alcan holding the remainder 20 per cent. Last month, the three parties signed a shareholders' agreement for the development of a 325,000-tonne-capacity smelter at Sohar.

The project site, located 11km from the port of Sohar, has plenty of room for expansion and downstream development, said Kinsman. A second pot line is planned to be added immediately after successful commissioning of the first pot line, featuring a configuration of 336 pots. In addition, the government has provided ample land for a metal cluster development adjacent to the smelter, while also committing adequate volumes of natural gas for two pot lines for a minimum of 20 years.

Financial close is slated for the fourth quarter of this year, with construction set to commence immediately thereafter. A contract for the Engineering, Procurement, Construction & Management (EPCM) of the smelter is currently under negotiation with preferred bidder Bechtel. Work on the front-end engineering design (FEED) will be implemented during the second and third quarters of this year.

A dedicated 800 MW gas fired power plant will also be built in tandem with the smelter, the CEO said. EPC tenders for the power station, which will come up at the port, are due to be submitted by next month. Outlining the distinguishing elements of the project, Kinsman said Sohar Aluminium will be the first smelter in the world to pioneer use of "best-in-class" Pechiney AP 35 technology. The selected technology is considered the most efficient and environment-friendly in the world, he added. Alcan will provide the smelting technology and technical assistance, besides serving as the metal offtaker.

Also envisaged as part of the smelter project are dedicated berth and storage facilities at the port for raw material handling and storage. Besides alumina, which is the basic ingredient for the smelter, significant quantities of cryolite, aluminium flouride, calcined petroleum coke and coal tar pitch will also be procured as raw materials.

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