Bechtel Wins First Phase EPC for $2 Billion Oman Smelter

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated). The $1.3 billion engineering, construction, and procurement (EPC) contract for the first phase of the $2 billion aluminum smelter project in Sohar, Oman, has been won by Bechtel (San Francisco, California). The contract was awarded by the Sohar Aluminum Smelter LLC, a joint venture between Abu Dhabi Water and Electricity Authority (ADWEA), Oman Oil Company, and Alcan (NYSE:AL )(Montreal, Quebec). In February this year, ADWEA signed a shareholders agreement with the Oman Oil Company and Alcan for development of a 330,000 ton per annum (tpa) smelter. Under a technology transfer agreement, signed at the same time, Alcan will provide Sohar with a license and related technical services necessary to implement Alcan’s AP 35 technology. ADWEA will provide technical services and management support for the 1,400 MW power plant to be built at the site.

In 2004 Alcan committed to a 20% stake in the Sohar Aluminum Company with OOC and ADWEA each taking 40%. Local banks will finance 60% of the deal and the balance will come from ADWE and other partners.

This will be the first time that proven AP 35 technology is used in a greenfield smelter. In the initial phase, a single potline will be built with associated carbon and casting facilities. Construction is expected to start in the second half of this year after financial close. A second potline, with about the same 330,000 ton capacity as the first, will be established in the future. This will bring capacity up to 650,000 tpa. The first 800 MW phase of the power plant will be operational by 2008. The Bechtel contract covers the first, 330,000 ton, phase of the project.

Sohar is in the Battinah coastal region, north of the capital, Muscat, and will give the area a major economic boost. The chairman of ADWEA, H.E. Maqbool Ali Sultan said, "This project will put forward employment opportunities in different fields within the Battinah coast, and highly technical jobs of international standards, both bringing added value to Oman."

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