Perdaman has inked a fresh deal for the construction of its $4.5 billion Urea plant after challenging market conditions and logistical issues sent costs climbing by $300 million.
Perdaman Group has inked a fresh deal for the construction of its $4.5 billion Urea plant on the Burrup Peninsula after challenging market conditions and logistical issues sent costs climbing by $US300 million ($A430 million).
Clough and Italian multinational services company Saipem were awarded the EPC contract for the project as part of a joint venture, which comprises the construction of a two million tonne urea plant with two urea trains, ammonia production facilities and a 100 megawatt gas plant.
The scope of work covered the commissioning of the facilities, as well as urea storage, a water treatment plant and seven kilometres of closed conveyor to the Pilbara Port.
The contract was officially signed off in March 2021, valued at USD$2.4 billion.
But the trio have since had to revise that deal, with the new contract value now USD$2.7 billion ($US3.86 billion), a cost increase Perdaman attributed to changes in the market and “logistical challenges”.
Despite this increase, Perdaman says the total cost of the project is about $A4.5 billion.
The construction of the facility is expected to begin during the third quarter of the 2022 calendar year, continue for three years and support around 2,000 jobs.
Once completed, the plant is expected to provide 200 permanent jobs in Karratha.
In a statement released this afternoon, Perdaman chair Vikas Rambal said the company was eager for the manufacturing project to get underway and grateful for the federal government’s continued support.
The news comes just months after the regional planning body unanimously backed the proposal following the endorsement of the City of Karratha council.
It also follows ministerial approval for the plant.
The company has not confirmed a final investment decision, but it is understood the industry expects an announcement within months.
Perdaman has already signed a 20-year contract with energy giant Woodside to buy domestic gas from its Scarborough development and Victoria-based fertiliser manufacturer Incitec Pivot to purchase the urea.
