ENERGY DEMAND: Oman's largest integrated steel mill seeks additional gas to support new pelletising plant, calcination unit
Conrad Prabhu
Muscat - Jindal Shadeed Iron & Steel, which owns and operates the Sultanate’s largest integrated steel mill in Sohar Port, says its plans to set up a major iron ore pelletising plant, as well as other ventures, are primarily dependent on the availability of competitively priced natural gas for these investments.
According to a senior company executive, the proposed pelletising plant is among a trio of planned ventures lined up for implementation in the next phase of Jindal Shadeed’s expansion — projects that can only move forward when natural gas or alternative fuel resources is allocated by the government.
“Availability of natural gas at subsidised rates is a great challenge (that must be addressed). Otherwise, it can adversely affect our future investment plans,” said Rama Subramanian Chidambaram, Chief Financial Officer.
“New projects envisaged by Jindal Shadeed are: a pellet plant to produce pellets as feed material for our Direct Reduction Iron (DRI) plant at Sohar; and a lime and dolomite calcination unit to produce calcined lime and dolomite for captive use in our Steel Melt Shop (SMS),” the executive told delegates on the concluding day of the ‘Investment in Oman’ forum held in the city last week.
Jindal Shadeed Iron & Steel’s complex at Sohar comprises a 1.5 million tonnes per annum (MTPA) capacity Direction Reduction Iron (DRI) plant built alongside a 2 MTPA Steel Melt Shop (SMS). In April, the company brought into operation a 1.4 MTPA capacity rolling mill that makes reinforced bars (rebars) for the construction sector.
“Jindal Shadeed, part of the $18 billion Indian steel conglomerate O P Jindal Group, is aligned with the vision of His Majesty the Sultan to reduce the country’s dependence on oil and gas. It has already made an investment of over $1.2 billion in the development of the first and largest integrated steel plant in the Sultanate, which is also the third largest steel plant in the GCC,” said Chidambaram.
In his presentation, the executive credited the success of the project to the Sultanate’s investment-friendly regulatory environment, modern infrastructure, and excellent logistics. However, he stressed that the issue of energy availability would need to be addressed if new projects can be progressed.
“Investments in new projects will purely depend on the availability of gas or cheap alternative fuels,” the CFO said. “Presently, we have a natural gas allocation of 14.09 million MMBTU per annum, which is sufficient to produce 1.46 MTPA of DRI against our requirement of 14.50 million MMBTU per annum to achieve a nameplate capacity of 1.50 MTPA. We have a shortfall of natural gas approximating 9.50–10.0 million MMBTU per annum for our existing facilities —SME and rolling mill, as well as the capacity enhancement of the Direct Reduction plant and for new projects,” Chidambaram explained.
The official also underlined Jindal Shadeed’s contribution to value creation in-country by undertaking all of the intermediate stages of rebar manufacturing within the Sultanate —an accomplishment that has earned its rebar and other products the prestigious ‘Oman Origin’ label, he added.
© Oman Daily Observer 2016
