SNC-Lavalin Makes Major Contract Connections in Algeria and UAE

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Researched by Industrial Info Resources (Sugar Land, Texas). Canada’s SNC-Lavalin (TSX:SNC) (Montreal, Quebec) continues to build a growing project contract portfolio in the Middle East and North Africa. The company has signed two contracts worth a total of $1.3 billion with Algeria’s Kahraba Hadjret En Nouss (SKH) to provide E+P+C (engineering, procurement and construction) for a new 1,227-megawatt (MW) gas-fired thermal power plant in the North African country’s province of Tipaza. It also has the operations and maintenance contract (O&M) contract for the project.

"The energy produced by this new power plant will represent about 20% of Algeria’s current energy supply, so the project is going to be an important driver of the country’s economy,” said Sami Bebawi, executive vice president with SNC-Lavalin Group.

Design work and construction activities for the plant, which will be situated west of Algiers, will commence immediately. On completion of the E+P+C contract, the power plant will be operated by SNC-Lavalin and the electrical power generated will be sold to the state’s Sonelgaz under a 20-year contract.

SKH is a newly established company that is 51% owned by Algerian Utilities International, Limited (AUI) and 49% by the three state-owned companies: Sonatrach, Sonelgaz and Algerian Energy Company. AUI is 51% owned by SNS-Lavalin and 49% by Mubadala Development Company (MDC), which is the investment and development company that is wholly-owned by the government of Abu-Dhabi.

The Canadian company has also won the feasibility study and EIA (environmental impact assessment) for a $6 billion project to develop a world-class greenfield aluminum smelter complex at the Khalifa Port and industrial zone in Abu Dhabi. The project is being developed jointly by Dubai Aluminum Company (DUBAL) and MDC.

The connections are good for SNC-Lavalin as the MDC-DUBAL alliance enjoys the direct support of the Crown Prince of Abu Dhabi, His Highness General Sheikh Mohammed bin Zayad Al Nahyan, supreme commander of UAE armed forces and chairman of the country’s executive council as well as the chairman of MDC. His Highness Sheikh Hamdan bin Rashid Al Maktoum, deputy ruler of Dubai, UAE minister of finance and chairman of DUBAL is also in the support group.

A project implementation team consisting of officials from both companies is currently studying the type of plotline, size, layout, equipment, power supply arrangements, and access to the new port and other aspects of the project. The project aims to be operational with 700,000 tons annual capacity in 2010 and move to a total capacity of 1.4 million tons per annum, making it the largest single site aluminum smelter in the world. For related news item see March 1, 2006 - Global Aluminum Growth Spawning Major New Smelter Projects.

This world-scale project is expected to be the first of a number of joint projects between MDC and DUBAL targeted to make the UAE a top-tier player and global force in the aluminum industry said Abdullah J Kalban, CEO of DUBAL. SNC-Lavalin has years of expertise gathered in building and expanding aluminum projects.

The 50/50 project between MDC and DUBAL will create 4,000 jobs for UAE citizens and add value to the local energy sector. It will also open the way for the development of further processing and downstream industries.

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