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$968 M India-Oman fertiliser project to be opened
Monday, 29 September 2003, 19:30 IST
MUSCAT: A $968-million Oman-India fertiliser project that has seen one of the largest investments by New Delhi abroad will have a foundation stone-laying ceremony Wednesday.
India's Minister for Chemicals and Fertilisers S.S. Dhindsa will be among those attending the event.
India's Ambassador to Oman Talmiz Ahmed said the project had one of the largest investments made by India abroad. Commercial production is expected to start by the third quarter of 2005.
The long delayed project was announced during a visit to Oman by former Indian prime minister P.V. Narasimha Rao in 1993.
Oman-India Fertiliser Co (Omifco) is located at Qalhat near Sur. The firm, which will set up two identical fertiliser plants, will produce 1.65 million tonnes of granulated urea and 0.25 million tonnes of surplus ammonia per annum.
Oman Oil Company holds a 50 percent stake in the joint venture, while the rest is split equally between two Indian fertiliser firms - Indian Farmers Fertiliser Cooperative (Iffco) and Krishak Bharati Cooperative (Kribhco).
The project will be built by Snamprogetti of Italy and Technip of France under a turnkey contract.
Omifco has earlier signed three different deals - a urea off-take agreement with the Indian government, an ammonia off-take contract with Iffco and a gas supply agreement with Oman's ministry of oil and gas.
With these agreements, the Indian government and Iffco have committed to buy the entire urea and surplus ammonia production of the proposed company at a pre-agreed price for 15 and 10 years respectively.
Oman's oil and gas ministry has agreed to supply gas feedstock for a 20-year period, at a fixed price for the first 10 years.
The urea off-take agreement will provide India with a reliable, long-term source of urea, at a competitive price.
The Omifco project costs $968 million and is being financed by $319 million in equity provided by shareholders and $649 million in debt comprising commercial, Italian and French export credit facilities provided by a group of 22 international and regional banks.
Observers said India's proximity to Oman would reduce the transportation cost of fertiliser as well as provide an uninterrupted supply of superior quality urea. The availability of natural gas in the Sultanate is another advantage.
Source: IANS
Source: IANS