Sohar: Sohar Aluminium's ambitious plan to double the capacity of its smelter to a world-scale 720,000 tonnes per annum hinges on the availability of gas at an economic price.
Oman's sole aluminium plant could be expanded in phase two at an estimated cost of $3 billion (Dh11.01 billion), according to Henk Pauw, Chief Executive Officer of Sohar Aluminium Company.
However, availability of gas at an economic price is the key to the expansion plans.
"No gas, no second phase," Pauw said in reply to a question whether the lack of gas could stall expansion plans.
Speaking to visiting journalists who were given a bus tour of the plant at the Sohar Industrial Estate, Pauw was optimistic that the government would make available gas and go ahead with the expansion of the smelter.
However, he confessed that he doesn't expect a subsidy from the government for the additional gas supply for the second phase.
"We were given a subsidy for the first phase for the gas price but I doubt we will get that benefit again," he added.
The official said that his team was positive about the expansion plans. "It is up to the government to decide," he said.
Pauw said the company had presented major plans for the expansion that would create more jobs for nationals in downstream industries.
He said a second phase expansion of the smelter would take around three years from the day gas is made available.
Pricing worry
The official said an additional one trillion cubic feet of gas would be needed if phase two is to go ahead. He pointed out that besides the availability of gas, it would also depend on gas pricing. According to him, gas is the only economically and environmentally viable source of energy for the smelter.
"Zero, no impact," he said in reply to a question on the impact of recent protests and road blockades in Sohar on the smelter.
However, he later agreed that there was a small cost involved when the company had to host the army. "I was happy for that small cost," he added.
A 50-hour supply of raw materials had ensured that production did not suffer from the protests before the army ensured that supplies out of the plant and movement of manpower resumed. The company, however, has learnt its lesson from the disturbances.
Expansion
"We have decided to increase the capacity of our on-site silos to hold the equivalent of seven days' supply of raw materials," Pauw said, adding that $7 million-$10 million would be spent for the expansion of the silos.
The company has 1,039 employees out of which 733 are Omanis. "Currently we have employed 73 per cent national workforce and we aim to boost it to 85 per cent by 2015," he said.
Sohar Aluminium is a joint venture of Oman Oil Company (40 per cent), a wholly Omani government-owned investment vehicle, Taqa (Abu Dhabi National Energy Company), a subsidiary of the Abu Dhabi Water and Electricity Authority (Adwea) and Rio Tinto Alcan (20 per cent), a global leader in aluminium smelting.
