:: QAFCO

QAFCO-6 Project EPC CONTRACT Signing Ceremony

An Engineering, Procurement and Construction contract for QAFCO-6 Expansion project was signed on November 5th 2009 between Qatar Fertilizer Company (QAFCO) and a consortium from the Italian company Saipem and the Korean company Hyundai Engineering & Construction Company. Mr. Abdulla H. Salatt, the QAFCO Board Chairman, signed for QAFCO, Mr. Varone Pietro - Chief Operating Officer Onshore Business Unit signed for Saipem while Mr. J. H. Kim, COO of Plant Division, Hyundai Eng. & Const Co. Ltd signed for Hyundai.

The signing ceremony, which took place at QAFCO's Doha office, was attended by QAFCO Board Members and Senior executives from Saipem and Hyundai Engineering and Construction company.

Speaking on the occasion, QAFCO Board Chairman, Mr. Abdulla H. Salatt, said, “The construction works will take 35 months and the completed project is expected to be taken over by QAFCO in the end of the 3rd quarter of 2012. Besides Saipem and Hyundai, the main contractors, a number of international and national construction companies will take part in the project construction as sub-contractors.”

Mr. Salatt, added “The project will help to create job opportunities for nationals and enable Qatari employees of QAFCO to acquire advanced expertise in the design, construction and operation of large-scale industrial projects. The project also puts into effect the country’s economic policy, which entails optimal utilisation of the nation’s gas resources, expansion in the petrochemical sector to bolster up the country’s economy and give further impetus to the development process”.

Mr. Khalifa Al-Sowaidi, QAFCO Managing Director, said in his speech to the press “The signing of this contract is an advanced step forward towards the execution of the project which will be constructed in Mesaieed Industrial city. The project facilities to be constructed include:

• A complete urea plant, with a design capacity of 3800 mtpd of urea including a granulator unit with a design capacity of 3850 mtpd

• A complete urea granules storage, with a capacity of 175,000 mt.

• A complete material handling system with a capacity of 1000 mtph of urea granules.

• Additional seawater cooling cells, steam and power generation facilities in addition to the ones already in the Qafco 5 Plant.

• All interconnections between QAFCO-6 and QAFCO-5 and the UFC 85 Plants.

Further elaborating on the project, Mr. Al Sowaidi said, “The EPC cost of the QAFCO-6 project will be around $610 million. The contract covers the supply of licenses, engineering, procurement, construction and start-up of the plant.”

Mr. Sowaidi further added “On completion, QAFCO-6 is set to achieve its objectives which include raising the Company’s production capacity and cutting down the unit production cost. -When completed in 2012, QAFCO-6 project will increase the company’s annual production capacity of urea to 5.6 million MT. -
thus the project is expected to boost QAFCO’s profitability and place it on a stronger footing as a key player in the global fertiliser market.

About QAFCO:
The Qatar Fertilise Company (QAFCO), was founded in 1969. The company is now owned by Industries Qatar (IQ) as 75% shareholder and Yara International as 25% shareholder. At present QAFCO complex comprises 4 completely integrated trains, QAFCO-1 (1973), QAFCO-2 (1979), QAFCO-3 (1997) and QAFCO-4 (2004). Each of these production lines consists of an ammonia plant and a urea plant. The overall annual production capacity of the three plants is 2 million tons of ammonia and 3 million tons of urea. Accordingly QAFCO has become one of the main producers and exporters of ammonia and urea in the world and the largest single producer of urea.

The QAFCO-5 expansion project, which will be completed in early 2011, will raise QAFCO’s annual production capacity to 3.8 million MT of ammonia and 4.3 million MT of urea making QAFCO the world’s largest single-site producer of both ammonia and urea -Thus far, QAFCO has become the world’s largest single site urea producer after the inauguration of its 4th expansion (QAFCO-4) in April 2004-. While the QAFCO-6 project will increase the company’s annual production capacity of urea to 5.6 million MT. consequently the project will strengthen the company’s position as a key player in the global fertilizer market.

High quality products, a strategic geographical location, efficient logistic facilities and reliability in supply are among the factors that propelled the growth of QAFCO into a main producer and exporter of ammonia and urea in the world.

QAFCO Signs Letter of Intent for Construction of QAFCO-6

A letter of intent was issued by Qatar Fertiliser Company (QAFCO) for the construction of QAFCO-6 project.

The EPC (Engineering Procurement Construction) contract was awarded to a consortium comprising Saipem of Italy as leader and the South Korean company Hyundai Engineering & Construction Co. Ltd. Saipem and Hyundai have been working at the Qafco 5 project which is under construction now.

The awarding of this letter of intend is an advanced step forward towards the execution of the project which is set to come as a milestone in the country’s industrial development plans. These plans receive the full support of HH the Emir, Sheikh Hamad bin Khalifa Al Thani and HH the Heir Apparent Sheikh Tamim Bin Hamad Al Thani and H. E. Abdulla bin Hamad Al-Attiya, Deputy Prime Minister and Minister of Energy and Industry

The EPC cost of the QAFCO-6 project will be around $610 million. The contract covers the supply of licenses, engineering, procurement, construction and start-up of a complete granulated urea production plant with a capacity of 3,850 tonnes per day and associated utilities and off-site units at the Qafco Complex in Mesaieed Industrial City.

The construction works will take 35 months and the completed project is expected to be taken over by QAFCO in the end of the 3rd quarter of 2012. Besides Saipem and Hyundai, the main contractors, a number of international and national construction companies will take part in the project construction as sub-contractors.

It is worth to mention that the initiative idea of QAFCO-6 project was based upon QAFCO’s successful business experience in the course of the last 4 decades, and the encouraging national vast reserve of natural gas. Having these potentials, QAFCO has taken upon itself the task of drawing up an ambitious future vision to ensure further development of the company. In this context the idea of initiating QAFCO-6 project, has come up.

Following the completion of the studies, which covered all the technical, economic and financing aspects of the project, besides the study of QAFCO’s existing infrastructures and available resources such as offices, storage facilities, workshops, jetties and the level of technical and administrative expertise currently available to the Company. In light of the findings of the said studies, the scale of the project as well as the required technical specifications were determined.

It became evident that the project is economically viable and can be executed with maximum cost-effectiveness in view of the following facts:

QAFCO is going to build on the similar experience it had gained during the construction of QAFCO-3 project, which went on stream in 1997 and QAFCO-4 project which was launched in April 2004 and QAFCO-5 which is under construction now.
The need to recruit additional manpower is limited.
Availability of skilled manpower to run and maintain the project facilities, both on the administrative and the technical sides.
Availability of adequate infrastructures.
The surge in demand for fertilisers, specially in Asia, QAFCO’s traditional market.
The vast experience QAFCO has gained in the production and marketing of its products.

QAFCO-6 will be as a state-of-the-art plant. The design and engineering of the project facilities will cater to the various environmental considerations and ensure compliance with the highest standards of safety.

On completion, QAFCO-6 is set to achieve the following objectives:

By raising the Company’s production capacity and cutting down the unit production cost, the expansion is expected to boost QAFCO’s profitability and place it on a stronger footing as a key player in the global fertiliser market.
The project will help to create job opportunities for nationals and enable Qatari employees of QAFCO to acquire advanced expertise in the design, construction and operation of large-scale industrial projects.
The project puts into effect the country’s economic policy, which entails optimal utilisation of the nation’s gas resources, expansion in the petrochemical sector to bolster up the country’s economy and give further impetus to the development process.

It is worth to mention that Qatar Fertiliser Company (QAFCO), was founded in 1969. The company is now owned by Industries Qatar (IQ) as 75% shareholder and Yara International as 25% shareholder. At present QAFCO complex comprises 4 completely integrated trains, QAFCO-1 (1973), QAFCO-2 (1979), QAFCO-3 (1997) and QAFCO-4 (2004). Each of these production lines consists of an ammonia plant and a urea plant. The overall annual production capacity of the 4 plants is 2 million tons of ammonia and 3 million tons of urea.