Karratha urea project : Clough and Saipem bag $2.7bn contract

Karratha urea project : Clough, an Australian engineering and construction company, and Italy-based Saipem in consortium have bagged a contract worth around $2.7bn from Perdaman Industries for developing a urea plant in Western Australia.

The urea plant will be built on the Burrup Peninsula, northwest of Karratha, on the Western Australian coastline with an investment of AUD 4.5 billion.

Perdaman Industries said that the Karratha urea project will convert natural gas into urea, which is estimated to produce considerable export earnings for Western Australia apart from giving security of supply for Australian farmers.

The Australian group has secured the supply of natural gas for 20 years from Woodside under a gas supply deal signed in 2018.

Vikas Rambal — Perdaman Industries Chairman said: “The coronavirus pandemic has taught us an important lesson about the food security for our society and our over-reliance on imports.”

Clough and Saipem bag $2.7bn contract for the Karratha urea project from Perdaman Industries. Photo courtesy of Perdaman.

The scope of work for Clough and Saipem covers engineering, procurement of equipment and materials, construction, pre-commissioning and commissioning (EPC) for executing a latest-generation fertilizers plant that can produce 2.14 million tons of urea per annum.

Clough and Saipem will take care of the EPC of a water treatment plant, a 100MW power plant, and urea storage, loading, and unloading facilities.

The joint venture will work with Haldor Topsoe, a technology provider using its SynCOR technology to construct a single-line ammonia plant, while Saipem’s Snamprogetti Urea technology will be employed for the production of urea.

Clough CEO comments on the Karratha urea project contract

Peter Bennett — Clough CEO and Managing Director said: “We are very excited to be part of this milestone project. During the construction phase, this world class facility will create around 2,000 jobs and will be an important development for the Australian resources industry, significantly reducing the nation’s reliance on fertilizer imports.”

According to Saipem, the contract agreement for the Karratha urea project replaces the previously announced one in December 2020, which was omitted from its backlog at the end of March 2022. The latest contract reflects the changed market scenario which has developed around the world in recent months, said Saipem.

Clough and Saipem will each get $1.35 billion from the contract with further risk and reward provisions for giving the flexibility to handle any possible further deterioration in market conditions.

The contract for the Karratha urea project is subject to a full notice to proceed to be issued by Perdaman Industries after closing the project financing and meeting other conditions.