THE ECHO - Ferrostaal
THE ECHO - Ferrostaal
THE ECHO - Ferrostaal
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TRANSFERRING <strong>THE</strong> TRINIDAD MODEL TO OMAN<br />
Oman provides excellent conditions for the construction of a<br />
methanol plant: good investment climate, outstanding infrastructure<br />
and a supply of natural gas. Furthermore, the sultanate<br />
offers local partners willing to invest in petrochemicals. The project<br />
company Oman Methanol Company consists of three strong<br />
partners: the Methanol Holdings (Trinidad) Limited (the owner<br />
of the Trinidad plants, the Oman’s OMZEST Group and MAN<br />
<strong>Ferrostaal</strong> AG. As with the plants in Trinidad, the project will<br />
be financed mainly by KfW loans backed by HERMES credit<br />
insurance.<br />
MAN <strong>Ferrostaal</strong> is responsible for the offshore part of the project,<br />
the engineering services and the procurement for the complete<br />
plant. The onshore component, chiefly the local construction and<br />
commissioning activities, will be handled by the Oman company<br />
Oman Proman Contracting & Trading LLC (OPCT). The target market<br />
for the methanol produced in Oman is the chemical industry in<br />
Europe and Asia.<br />
Holger Lexius<br />
02<br />
03<br />
01. Service buildings, one main<br />
pipe bridge and two water<br />
tanks – the MO3000 plant<br />
02. The administrative building.<br />
03. Welding a water tank.<br />
<strong>THE</strong> <strong>ECHO</strong> 1/2006 19<br />
<strong>THE</strong> TRINIDAD MODEL<br />
Over the last 15 years, MAN <strong>Ferrostaal</strong> and its partners have<br />
evolved into the second-largest producer of methanol, producing<br />
over 4 million tons per year. The company has stakes in five<br />
methanol plants in Trinidad, four of which they built as a general<br />
contractor.<br />
MAN <strong>Ferrostaal</strong> developed a new financing model in which the<br />
company itself acquires an investment in the plant, thereby<br />
assuming part of the risk. The essence of this concept was that<br />
MAN <strong>Ferrostaal</strong> had to secure every link in the value-added<br />
chain, from processing the methanol, to transport, to marketing<br />
of the product.<br />
In 2000, MAN <strong>Ferrostaal</strong> began planning the world’s largest<br />
methanol plant, the M5000, also to be built in Trinidad. The<br />
necessary equity capital was financed through the cash flow of<br />
the existing methanol plants. The property value of the almost<br />
entirely unencumbered “old” plants also represented additional<br />
collateral for the foreign financing of the new M5000 plant. This<br />
so-called structured project financing is a combination of some<br />
aspects of project financing with components of classic corporate<br />
financing.<br />
This model, whereby the general contractor takes an equity<br />
stake in the project, turned out to be advantageous to the<br />
clients in the case of the four plants built in Trinidad: all of the<br />
plants were finished ahead of schedule and within the planned<br />
budget. All of the plants have attained or exceed the agreed<br />
capacities and are producing according to the specifications,<br />
with a very high level of operational availability. With this business<br />
model, MAN <strong>Ferrostaal</strong> changed the role of the general contractor<br />
in the construction of large industrial plants. The focus in<br />
building the plant was not only on turnkey delivery, but also on<br />
all other elements that were essential to the plant’s success.<br />
METHANOL<br />
In recent years, the market for methanol has experienced a<br />
stable, upward trend. While the price per ton of methanol was<br />
still around EUR 125 at the beginning of 2002, it is currently<br />
over EUR 250 due to the closing down of plants in the USA<br />
and Europe. Methanol can be used either as environmentally<br />
friendly fuel or as a raw material for further processing in the<br />
chemical industry. Thus, methanol can be found in plastics,<br />
synthetic textiles, pigments, coatings and many other chemical<br />
products. At normal temperatures and atmospheric pressure,<br />
methanol is a liquid and is therefore easy to transport over long<br />
distances by ship and by truck.