The owners of the Qatar Fertiliser Company (Qafco), Qatar Petroleum (75%) and Norsk Hydro (25%), have approved the implementation of the Qafco 4 project that will make Qafco the world's largest single site producer of urea and ammonia with a total capacity to produce 2.8 million tonnes of urea and 2 million tonnes of ammonia. The scope of the project is to build a new ammonia-urea complex at Messaied in Qatar with a total cost of USD 535 million. Production capacities of the new Qafco 4 plants are to be 2000 t/day of ammonia and 3200 t/day of urea. In addition to the production units, the project includes new storage capacity for urea and ammonia and a separate formaldehyde plant that will cover all of Qafco's needs for formaldehyde. The project will be partly financed by a loan of USD 400 million from a consortium of international and Gulf based banks. The remaining financing will come from Qafco's own operations.
On September 5, Qafco signed an agreement with the German company Krupp Uhde for the construction of the new plants. The start of construction is planned for October this year, and the new plants are expected to be in operation during the second half of 2004.
In connection with the project, Norsk Hydro has also signed a 13 year marketing agreement with Qafco to sell part of its urea production in international markets. The new agreement replaces an existing urea marketing agreement with Qafco.
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, 2000 and subsequent filings on Form 6-K with the U.S. Securities and Exchange Commission.