Oman Oil company, LG International sign agreement; New EDC plant to be built
Oman Oil company and LG International (LGI) of Korea signed at the OOC premises Sunday a shareholders agreement. According to this agreement, the OOC acquired 30% equity interest in LG energy. In addition, OOC signed a deal with the Iranian National Petrochemical Company for the construction of an ethylene dicholoride (EDC) plant at Sohar port industrial zone.
The agreement WITH LGI was signed by Dr. Mohamed bin Hamad al-Rumhi, Oil and Gas Minister and Deputy Chairman of OOC board on behalf of the OOC, while David H. Kang, Executive Vice President of LG International Corporation signed for his side.
According to ONA, al-Rumhi said the signing of this agreement comes within the context of the Sultanate policy to invest inside the country and abroad. He said this project is one of the important investment projects to be implemented by the OOC outside the Sultanate and it represents its first investment in electricity field.
He added that “this acquisition will enhance our existing relationship with the LG group which owns 20% equity of Oman polypropylene company”.
LG energy was established in 1996 to own and operate a power generating plant in South Korea.
Kang said his company was happy with this agreement which will enable the OOC to invest in South Korea for the first time.
Regarding thr plant, the OOC will own 33.4% stake in the venture while LGI and NPC each will acquire a share of 33.3%. The Omani Minister said 30% of the project cost will be in the form of equity capital and 70% will be financed from loans to be obtained from local and international banks. He said financial closure will be concluded in the last quarter of 2005, while implementation will commence in the first quarter of 2006 and commercial operation in the second quarter of 2008.
Maqbool said as per the agreement, LGI will build the plant and the ethylene feed-stock will be sourced from NPC.
According to him, the capacity of the plant to produce 300,000 tons of ethylene dichloride per year will go to the manufacturing of various plastic products. The implementation of the project will provide 170 employment opportunities in different fields and highly technical jobs. (albawaba.com)