A consortium led by South Korean company Hyundai Engineering has won a $5.1bn contract to build a major fertiliser manufacturing complex in Russia’s Pacific port city of Nakhodka.
Of national significance to both countries, the agreement was signed by Korean president Park Geun-hye and her Russia counterpart Vladimir Putin on Saturday, 3 September, during an international economic forum in Vladivostok, Yonhap news agency reports.
Also in the consortium are Hyundai Engineering & Construction and the Toyo Engineering Corporation of Japan. The client for the scheme is Russia’s National Chemical Group (NChG).
The lump sum, turnkey contract sees the consortium building five plants in all, two ammonia production plants with a combined daily capacity of 6,600 tons, two urea plants with a combined daily capacity of 6,000 tons and one methanol plant with a daily capacity of 3,000 tons, reports Korea Times.
In planning since 2012, the 628-hectare complex is a high priority in the development of Russia’s Far East, and will use gas from Russia’s Sakhalin and Yakutia fields as feedstock, NchG has said.
The company hopes to export the fertiliser to India, Southeast Asia and Latin America, and intends to build a dedicated port terminal to facilitate this.
NchG had hoped the plants would be producing by 2019, but the the construction period is 62 months, according to reports, which would push completion back to mid-2021.
The Hyundai-Toyo consortium was chosen as preferred bidder in September 2014.
Hyundai Engineering and Hyundai Engineering & Construction have taken shares in the project of approximately 50% and 30%, respectively, with Japan’s Toyo taking 20%, Korea Times reports.
The complex will update Russia’s chemical manufacturing capacity, with many of its plants not updated since the 1970s, NchG said.
Alongside the fertiliser plant, Hyundai Heavy Industries was selected as preferred bidder by state shipbuilder Sovcomflot Group to build 12 oil tankers worth $660m.
Daewoo Shipbuilding & Marine Engineering, another Korean engineering giant, recently signed a memorandum of understanding with Russia’s Far Eastern Shipbuilding and Ship Repair Center to establish a joint venture for building the Zvezda Shipbuilding Complex in the Pacific coast town of Bolshoy Kamen.
Image: The port of Nakhodka (Wikimedia Commons)