Omifco fertiliser project to go on stream early

The $969 million (Rs 4,500 crore) fertiliser project of Oman India Fertliser Company SAOC (Omifco) at Sur Industrial Estate in Oman will begin commercial production of urea and ammonia from February 2005, five months in advance than earlier planned.

Omifco is a 2:1:1 Indo-Oman joint venture firm formed with a total equity of $240 million by Oman Oil Company SAOC, Indian Farmers Fertliser Cooperative Ltd (Iffco) and Krishak Bharati Cooperative Ltd (Kribhco).

The company will operate and maintain the project, for which the funding requirements have been met with $321 million of equity and $649 million of debt.

The company will export the entire urea and ammonia produced to India, thus filling the growing domestic demand-supply gap for fertilisers.

T R Chaudhary, director (operations) of Kribhco, said, "The project comprises a 3,500 metric tonne per day (MTPD) ammonia plant and a 5,060 MTPD urea plant. It is expected to be commissioned much earlier than as scheduled in July. Engineering, procurement and construction (EPC) activities are almost over, while certain mechanical activities that are due are expected to completed shortly. We are confident that the plant would kick start production by February 2005."

A senior official with Iffco said, "This project will see the production of 16.52 lakh tonne of urea per year and 2.48 lakh tonne of ammonia per year. Both the products would be exported in bulk through sea route to India as the government of India, along with Iffco and Kribhco, will offtake the entire production. Iffco will also offtake the surplus ammonia production."

Meanwhile, Kribhco's Chaudhury said, "We selected Oman for setting up the project as gas prices there are much lower than those in other places, including India. The average cost of producing fertilisers in Oman is $115 dollars per tonne, and anywhere outside Oman, it is $225 dollar per tonne."

The government of the Sultanate of Oman will supply gas to the project from its Oman LNG plant located in Sur. "The Oman Ministry of Oil and Gas will supply the gas feedstock under a long-term agreement which was signed earlier in 2003," the Iffco official said.

The Oman Ministry has agreed to supply gas at a price of $0.77 per million British thermal units (MMBtu) for this project, while in India the price is at $2.15 per MMBtu.

Omifco was established in August 2002 as a result of an initiative by the governments of Oman and India to construct, own and operate a modern world scale two-train ammonia-urea fertiliser manufacturing plant.

The project's implementation by a joint venture of Snamprogetti of Italy and Technip-Coflexip of France under a lumpsum turnkey EPC contract started over two years ago.