Oslo (2009-10-12): Qatar Fertiliser Company (Qafco) has signed a letter of intent for the construction of the Qafco-6 expansion project. The cost of the project is estimated at USD 610 million.
A letter of intent between Qafco and a consortium of the Italian company Saipem and the Korean company Hyundai has been signed for the EPC (Engineering, Procurement and Construction) of the Qafco-6 expansion project. Yara International ASA owns 25% of Qafco, the remaining 75% is owned by Industries Qatar.
The Qafco-6 project includes the construction of a urea plant with a total daily production capacity of 3,850 tons. The construction work is scheduled to take approximately 35 months with the completion around the end of third quarter 2012.
The consortium of Saipem and Hyundai is currently constructing the Qafco-5 project comprising two ammonia plants with a total daily production capacity of 4,600 tons, and a urea plant with a total daily production capacity of 3,850 tons with completion expected by end of first quarter 2011. By choosing the same construction consortium and design for Qafco-6 as for Qafco-5, major cost synergies are captured from the consortium already having resources mobilized at site and reuse of experience.
Upon completion of the Qafco-6 project, Qafco's total annual production capacity will increase to around 3.8 million tons of ammonia and 5.6 million tons of urea. Qafco strengthens its position as the world's largest single site producer of ammonia and urea.
"Qafco is a long standing and successful partnership, and the expansion will further strengthen Yara's production base with competitive gas sourcing. The investment cost for Qafco-6 benefits from cost synergies with the ongoing Qafco-5 project. Qafco's scale and competitive gas sourcing combined with Yara's global marketing network forms a strong foundation for profitable expansion," says President and CEO of Yara International, Jørgen Ole Haslestad.
The project will be partially financed with bank loans by Qafco, with the balance coming from Qafco's existing reserves and cash flows from its operations.
Torgeir Kvidal, Investor Relations
Telephone (+47) 24 15 72 95
Cellular (+47) 91 339 832
Asle Skredderberget, Media Relations
Cellular (+47) 41 443 610
Yara International ASA is the world's leading chemical company that converts energy, natural minerals and nitrogen from the air into essential products for farmers and industrial customers. As the number one global supplier of mineral fertilizers, we help provide food for a growing world population. Our industrial product portfolio includes environmental protection agents that prevent air pollution. Yara's global workforce of 8000 employees represents the great diversity and knowledge that enables Yara to remain a leading performer in the industry.