India, Oman begin work on major fertiliser project

Thursday, 02 October 2003, 19:30 IST
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MUSCAT: India and Oman Wednesday signalled a new era in their bilateral economic cooperation by laying the foundation for one of the largest joint fertiliser projects in the Gulf region. India's Chemicals and Fertilisers Minister S.S. Dhindsa specially flew into the sultanate to take part in the foundation-stone laying ceremony of the $1 billion Oman-India Fertiliser Company (OMIFCO) located at Qalhat near Sur. Oman's Commerce and Industry Minister Maqbool Ali Sultan, senior officials of the sultanate, India's Ambassador to Oman Talmiz Ahmed and senior Indian embassy officials were present. Speaking on the occasion, Dhindsa invited Oman to invest in India's chemical and hydrocarbon sectors to the mutual benefit of the two countries and said the Oman-India fertiliser project would provide the impetus for closer political, strategic and economic links between the two sides. The long-delayed project was first announced during the visit of then Indian prime minister P.V. Narasimha Rao to Oman in 1993. Dhindsa specially referred to Oman's tradition of tolerance and progress that allowed its large Indian community to prosper. He said the project had special significance for India "due to the high place that Oman occupies in our relations with countries located in the Middle East". "We recognize the significance attached to the project by the leadership of Oman. This venture reflects our desire to pursue closer political, strategic and economic links between our two countries," he said. Dhindsa noted the project symbolised the fruition of the shared vision of Sultan Qaboos and Indian Prime Minister Atal Behari Vajpayee. "The success of this joint venture can set the tone for undertaking other similar ventures to the mutual benefit of people of both countries," he said. Dhindsa's counterpart described the project as a "landmark in the historical and deep-rooted friendship and cooperative relations between Oman and India". The project can be considered as a crowning achievement to the constructive efforts that are being exerted by the Oman-India Joint Commission to promote cooperation aimed at achieving mutual benefits, Minister Maqbool Ali Sultan said. Describing the project as a "feasible investment", he said it is strategically important for both countries as it provides India with a stable source of urea at competitive prices. According to Ambassador Ahmed, the project is one of the largest investments made by India abroad. Commercial production is expected to start by the third quarter of 2005. Oman Oil Company holds 50 percent stake in the joint venture, the balance 50 percent being equally held by two Indian fertiliser companies -- Indian Farmers Fertiliser Co-operative Limited (IFFCO) and Krishak Bharati Cooperative Limited. Snamprogetti of Italy and Technip of France will build the project under a turnkey contract. OMIFCO had earlier signed three different agreements -- a urea off-take agreement with the Indian government, an ammonia off-take agreement with the IFFCO and a gas supply agreement with Oman's oil and gas ministry. 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. Further, Oman's oil and gas ministry has made a commitment to supply gas feedstock for a 20-year period at a price fixed for the first 10 years. The urea off-take agreement will provide India with a reliable and long-term source of urea at a competitive price.
Source: IANS
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