Qatar Petroleum and Hydro Plan World-Class Aluminium Project
December 06 2004 - 3:50AM
PR Newswire (US)
Qatar Petroleum and Hydro Plan World-Class Aluminium Project OSLO,
Norway, Dec. 6 /PRNewswire-FirstCall/ -- A Heads of Agreement
between Qatar Petroleum and Hydro was signed in Doha today by HE
Abdullah Bin Hamad Al-Attiyah, Second Deputy Premier, Minister of
Energy and Industry, Chairman of the Board of Directors and
Managing Director of Qatar Petroleum and Hydro's President and CEO,
Eivind Reiten. Qatar Petroleum and Hydro are planning to develop
one of the world's largest aluminium plants in Qatar, an ideal
location for serving growing markets in Asia, Europe and also
North-America. Planned capacity of a first phase is 570,000 tonnes
of primary aluminium. Qatar Petroleum is a major producer of
natural gas and has contributed to developing several industrial
projects in Qatar based on its vast gas reserves. Primary aluminium
production will represent a new step in industrial diversification
in Qatar. For Hydro, one of the world's three largest integrated
aluminium companies, the project will be a major strategic
investment, improving relative cost position in primary production
and further strengthening its positions in global metal markets.
The planned project involves the construction of an aluminium metal
plant, anode plant and casthouse, in addition to a dedicated power
plant. Production will be based on Hydro's reduction cell
technology. The plant will be built in the Mesaieed Industrial
Area, south of Doha. The project is planned to reach full capacity
during 2009. HE Abdullah Bin Hamad Al-Attiyah, Second Deputy
Premier, Minister of Energy and Industry, Chairman of the Board of
Directors and Managing Director of Qatar Petroleum stated: "Qatar
is a strategic location for this project and has proven natural gas
reserves of more than 900 trillion cubic feet, the world's second
largest reserves, representing secure and competitive supplies for
power production. The policy of the government of Qatar is to
utilize the country's natural resources for economic and industrial
development. Participation in a project for primary aluminium
production fits this policy. Qatar offers a well developed
industrial infrastructure and business climate. Excellent market
flexibility between Europe and Asia, with a potential to serve the
US market, ensuring highly competitive cost to market, makes Qatar
a good strategic location for the production of primary aluminium."
Hydro's President and CEO, Eivind Reiten, stated that Hydro's
technology, competence and market positions will help leverage the
value of the project. "A major primary aluminium production unit in
Qatar will be a very important step to strengthen our position as a
top tier global aluminium company. This project will also
strengthen the good long-standing relationship between Hydro and
Qatar. Hydro has operated successfully in Qatar for 35 years in
close cooperation with Qatar Petroleum (the former Qatar General
Petroleum Corporation). We are looking forward to developing and
implementing the project, once the final negotiations and detailed
engineering have been successfully completed," said Reiten upon
signing the agreement. Solid market prospects Markets for aluminium
products and solutions are continuing its healthy growth as the
metal offers unique benefits in terms of light weight, strength,
conductivity and good energy absorption. In addition, it is easy to
form and process, impermeable and odourless and is easily recycled.
This has led to an annual global growth in the use of global
primary aluminium of 3-4 percent in recent decades. Forecasts
support that this development will continue, with the highest
growth expected in China and other emerging economies. Over the
years, Hydro has developed a leading position in the aluminium
market in Europe. The company also has a strong position in the US
and is about to establish basis for further growth in Asia. The
unique Hydro Metal Supplier Concept has been instrumental for this
profitable growth and allows the company to go to market with more
than 3.3 million tonnes of metal products, well beyond the current
equity primary aluminium production totalling around 1.5 million
tonnes. The additional 1.8 million tonnes are mainly based on
remelted scrap and ingots, as well as metal products supplied by
strategic partners. The project The project will consist of power
generation, primary aluminium production and anode production, as
well as a casthouse producing value added aluminium metal products.
To serve the aluminium production with required stable supplies of
power, approximately 1,000 MW for the first phase, a new dedicated
power plant will be constructed. The plant site is sufficient for
more than a doubling of the primary aluminium production capacity,
up to 1.2 million tonnes per year. The power plant, as well as the
primary aluminium plant, will be owned 51 percent by Qatar
Petroleum and 49 percent by Hydro. The product casthouse will have
the capacity to produce value-added products from all of the pot
room metal. As Hydro is a global leader in the production, sales
and marketing of aluminium metal products, Hydro will be
responsible for marketing all casthouse products through its global
system. The casthouse will be owned 51 percent by Hydro and 49
percent by Qatar Petroleum. Investment Preliminary estimate for the
total project is approximately 3 billion USD. Hydro's share of the
investment is estimated to be around 1.5 billion USD. The smelter
is projected to have an investment per ton capacity in the region
of 4000 USD, comparing favorably to other greenfield projects. The
low investment cost per tonne, combined with a long-term,
competitive gas contract, will ensure a robust project, exceeding
Hydro's profitability targets. Project execution Construction is
expected to be similar to Hydro's recently completed project in
Sunndal, Norway. Hydro has successfully completed several major
investment projects in its oil and gas activities, in aluminium and
in polymers in recent years, including major projects in Qatar. At
the same time, Hydro is preparing to phase out older Soderberg
potlines at its primary aluminium plants in Ardal and Hoyanger,
Norway, latest by the end of 2006, with approximately 70,000 tonnes
annual production capacity, in order to meet future emission
standards. Hydro is also reviewing the viability of its primary
aluminium plants in Germany, where the anticipated increased costs
for electric power and the strong Euro constitute major challenges.
About the partners Qatar Petroleum (previously known as Qatar
General Petroleum Corporation) was established in 1974 as a
national corporation completely owned by the State of Qatar. Qatar
Petroleum is responsible for all oil and gas industry processes in
Qatar and abroad, including the exploration and drilling for oil,
natural gas and other hydrocarbon substances, production, refining,
transport and storage of the aforementioned substances and any of
their derivatives and by-products, as well as trading in,
distribution, sale and export of these substances. Hydro is a
Fortune 500 energy and aluminium supplier operating in more than 40
countries. The company is a leading offshore producer of oil and
gas, the world's third-largest aluminium supplier and a leader in
the development of renewable energy sources. Hydro's 36,000
employees create value by strengthening the viability of the
customers and communities we serve. Certain statements in this
press release are or may constitute "forward- looking" statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Statements that are not in the nature of historical facts
may be deemed to be forward-looking statements and may contain
identifying words such as "believes", "anticipates", "plans",
"expects" and similar expressions. These forward looking statements
are based on Hydro's current expectations, assumptions, estimates
and projections about the company and the industries in which it
engages in business. All forward-looking statements involve risks
and uncertainties. For a detailed description of factors that could
cause Hydro's actual results to differ materially from those
expressed in or implied by such statements, please refer to its
annual report on Form 20-F for the year-ended December 31, 2003 and
subsequent filings on Form 6-K with the U.S. Securities and
Exchange Commission. With respect to each non- GAAP financial
measure Hydro uses in connection with its financial reporting and
other public communications, Hydro provides a presentation of what
Hydro believes to be the most directly comparable GAAP financial
measure and a reconciliation between the non-GAAP and GAAP
measures. This information can be found in Hydro's earnings press
releases, quarterly reports and other written communications, all
of which have been posted to Hydro's website
(http://www.hydro.com/). Contact Idar Eikrem Telephone (+47) 22 53
32 73 Cellular (+47) 95 02 83 63 E-mail Thomas Knutzen Telephone
+47 22539115 Cellular +47 90612359 E-mail Hydro Aluminium
Drammensveien 264 N-0240 Oslo Norway Telephone: (+47) 22 53 81 00
Fax: (+47) 22 53 27 25 http://www.hydro.com/ The press release can
be downloaded from the following link:
http://hugin.info/106/R/971330/142282.pdf DATASOURCE: Norsk Hydro
CONTACT: Idar Eikrem, +47-22-53-32-73, cell, +47-95-02-83-63, or ;
or Thomas Knutzen, +47-22539115, cell, +47-90612359, or Web site:
http://hugin.info/106/R/971330/142282.pdf http://www.hydro.com/
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