Oslo-Qatar Fertiliser Co. (Qafco) has signed a letter of intent for the construction of the Qafco-6 expansion project. The cost of the project is estimated at US$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 engineering, procurement, and construction (EPC) of the Qafco-6 expansion project. Yara International ASA owns 25 percent of Qafco, with the remaining 75 percent owned by Industries Qatar. The Qafco-6 project includes the construction of a urea plant with a total daily production capacity of 3,850 mt. The construction work is scheduled to take approximately 35 months, with 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 mt and a urea plant with a total daily production capacity of 3,850 mt, with completion expected by the end of first quarter 2011. By choosing the same construction consortium and design for Qafco-6 as for Qafco-5, major cost synergies are realized since the consortium now has experience as well as resources mobilized at the site. Upon completion of the Qafco-6 project, Qafco’s total annual production capacity will increase to around 3.8 million mt of ammonia and 5.6 million mt of urea. Qafco will strengthen its position as the world’s largest single-site producer of ammonia and urea. The project will be partially financed with bank loans by Qafco, with the balance coming from Qafco’s existing reserves and cash flow from its operations.
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