Construction is due to begin in September of the Oman Formaldehyde Chemical Company LLC (OFCC) plant in the Sohar Industrial Port Area.
The plant has been designed to produce 125 tonnes per day of urea formaldehyde concentrate (UFC) or 203 tonnes per day of aqueous formaldehyde or any combination of the two. However, a company spokesman said the planned second phase, starting as soon as the first phase is commissioned in the third quarter of 2007, would double production capacity.
OFCC is a 50:50 joint venture between Oman Methanol Holding Company LLC (OMHC) of the Omzest Group of Oman and Manso Holding Company WLL of Manso Group, Bahrain. OMHC is also the sponsor and 30 per cent shareholder of Oman Methanol Company LLC, which is in the process of setting up a 3,000 tonnes-per-day methanol plant in the Sohar Industrial Port area, the first large private sector petrochemical project in Oman.
The formaldehyde project is a downstream industry to the methanol plant. Long-term arrangements have been made for the supply of methanol from the methanol plant coming up in Sohar. The OFCC plant does not require any natural gas and in fact offers significant value addition to methanol, the raw material for its products. It also offers a unique opportunity for the development of formaldehyde derivatives industries.
Most of the UFC will be consumed within Oman. Some of the production will go to a fertiliser plant of the Oman India Fertiliser Company in Sur, eastern Oman, and some to the fertiliser plant being built in Sohar by Sohar International Urea and Chemical Industries. Both these fertiliser plants will take in around 75,000 tonnes per year. The balance will be initially exported. The project has committed to sell its entire product through a Manso group company under a long-term contract.
The OFCC plant will use the well-known and proven technology of Haldor Topsoe A/S of Denmark. This technology offers the option to double the capacity of the OFCC plant at a significant lower capital cost. Being a 50 per cent shareholder, the Manso Group will provide technical and managerial support for the construction and operation of the plant.
Describing the uniqueness of the project, the spokesman said: “This is an Omani project utilising locally produced raw material (methanol), selling a majority of its product locally, receiving funding through debt project finance provided by BankMuscat without any syndication and undergoing construction by an Omani contractor.” He said the investment in the first phase would be $22 million and some 52 direct jobs and many more indirect jobs would be created.
OFCC executed all the project agreements on March 22.
The Omzest Group is one of the largest and most diversified business groups in Oman and focuses on manufacturing, employment generation and wealth creation. Its target areas for investment are petrochemical projects such as methanol, formaldehyde and acetic acid.
