THE ECHO - Ferrostaal

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