Subsidiary company reports


Signing of the pre-construction services agreement with Technip for the Gabon Fertiliser Project

Tata Chemicals (TCL), Olam International (Olam') and the Government of the Republic of Gabon (RoG') announce the signing of the pre-construction services agreement for the proposed 1.3 million tonnes per annum (MTPA) urea fertiliser plant in Gabon (project) between their joint venture company Gabon Fertiliser Company (GFC) and Technip SA (Technip) (a world leader in project management, engineering and construction in the energy and chemicals industry). The project is based on natural gas as feedstock to be supplied at competitive price by Republic of Gabon and will produce granular urea.

This marks the first definitive step taken by GFC in the construction of the ammonia / urea fertiliser plant post the successful completion of the gas due diligence study that confirmed the availability of gas both in terms of the cumulative quantity and quality of gas required for the project. GFC is expected to be one of the lowest-cost producers of urea globally and therefore well positioned to meet the demand in its key target markets.

GFC has chosen the convertible lump sum turn key ("LSTK") methodology to ensure that the project is implemented within the best time and cost norms of the industry. This envisages a two-phase approach where the front-end engineering and design (FEED) is carried out in the first phase to fully define the parameters of the project. In parallel, the project cost will be defined using an open book estimation (OBE) methodology, with the full involvement of GFC. Once the FEED and OBE are completed, the project will be converted into an LSTK contract. Apart from giving considerable flexibility in the optimal design of the plant, this methodology is expected to result in significant savings in both the capital expenditure cost and project schedule. This is ideally suited for projects in remote locations where the costs and the time schedule are difficult to estimate accurately.

GFC selected Technip after a comprehensive bidding and evaluation process. With its worldwide experience in design and implementation of complex, large projects, and their specific experience in Africa, Technip was selected as the most competent and competitive EPC contractor for executing this project. As the main contractor for the project, Technip shall provide the licenced technologies of Haldor Topsoe for ammonia, Saipem for urea and UFT for urea granulation plants, respectively. It is targeted to complete the FEED and OBE within seven months and thereafter, achieve the commercial production of urea within 31 months.