Samsung wins $3.5bn Collie project

04/06/2009 - 09:54

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Perdaman Chemicals and Fertilisers, the company behind the $3.5 billion urea plant near Collie, has awarded an engineering and construction contract to a Korean and Indonesian consortium.

Perdaman Chemicals and Fertilisers, the company behind the $3.5 billion urea plant near Collie, has awarded an engineering and construction contract to a Korean and Indonesian consortium.

The company has signed a heads of agreement for the engineering, procurement and construction (EPC) work with Korean firm Samsung Engineering Co and Indonesian business P.T. Inti Karya Persada Tehnik.

Samsung will act as the lead contractor for the work.

"We selected Samsung and IKPT because they demonstrated the experience, technical ability and financial strength to successfully complete a project of the size and complexity of the Collie Urea Project to within 2013 timeframe," Perdaman managing director Vikas Rambal said.

Perdaman has received in-principle approval from the state government for the project, which will be built at Shotts Industrial Park.

The plant has capacity to produce 2 million tonnes of urea per annum which will be primarily exported, generating some $850 million of export earnings for WA each year.

Perdaman has already arranged private equity funding and is in the process of securing bank debt, with agreements expected early next year.

The company is also working on securing the necessary government approvals for the project.

 

 

The announcement is below:

 

 

Perdaman Chemicals and Fertilisers (Perdaman) has signed a binding Heads of Agreement for the EPC (Engineering, Procurement and Construction) work for its Collie Urea Project in Western Australia involving Samsung Engineering Co. Ltd. of Korea and P.T. Inti Karya Persada Tehnik (IKPT) of Indonesia.

Perdaman will invest a total of A$3.5 billion to develop the plant that will transform sub‐bituminous coal into urea, a widely used form of fertiliser, using innovative and low emissions coal gasification technology.

The Collie Urea Project, south of Perth, is strongly supported by the Western Australian Government, which is establishing the new Shotts Industrial Park, enabling the urea plant to be located adjacent to the coal resources required for its production process.

Perdaman and the State Government believe the Collie Urea Project will provide a major boost to the Western Australian economy by generating on average around 1,500 jobs during the three‐year construction phase. On
completion the plant will provide 200 permanent jobs in the Collie area.

With the capacity to produce 2 million tonnes of urea per annum, primarily for export, the plant will generate in excess of A$850 million per annum in export earnings for Western Australia.

Samsung will act as the lead contractor for the EPC work, which consists of the gasification island, which is central to the conversion of coal to hydrogen rich gas, the product island, which converts gas to urea, and the various utilities. The contract comprises Phase 1 work up to financial close for the project during the first quarter of 2010, and for Phase 2 construction work scheduled to start later in 2010.

Perdaman's Chairman and Managing Director Vikas Rambal said the company had undertaken an exhaustive tender process that commenced in late 2008 with a number of major international contractors and involved five months of technical and commercial evaluation.

"We selected Samsung and IKPT because they demonstrated the experience, technical ability and financial strength to successfully complete a project of the size and complexity of the Collie Urea Project to within 2013 timeframe."

Samsung Engineering's Chief Executive Officer, Yeon-Joo Jung said the company was pleased to secure a major project to deliver a plant based on best in class, environmentally friendly coal gasification technology.

"Our vast experience in delivering major industrial facilities that involve constructing state of the art technology will be vital in bringing this project to completion over the next four years."

Coal gasification represents a low‐emission use of coal that is "sequester ready" for when carbon storage becomes available on a commercial scale.

Mr Rambal said signing the EPC contract marked a significant step forward for the Collie Urea Project and the news would be welcomed by the project's supporters throughout Western Australia, particularly in the Collie region.

"We are now full steam ahead on this project and our work with Western Australian Government Departments in the various approvals for this project, including our community consultation processes which will continue later this month," he said.

 

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