MHI and Sojitz Receive $1 Billion Order from Russian Republic of Tatarstan

The new fertilizer plant will be built in Tatarstan at Mendeleevsk, approximately 1,000 kilometers east of Moscow. It will be one of the world's largest plants capable of concurrently producing ammonia and methanol from natural gas. The plant will have a capacity to produce 2,050 mtpd (metric tons per day) of ammonia, or 1,382 mtpd of ammonia and 668 mtpd of methanol in the case of concurrent production. It will adopt process technologies from Haldor Topsøe A/S of Denmark, Saipem S.p.A. of Italy, and Uhde Fertilizer Technology B.V. of the Netherlands. The plant is slated to go on-stream in 2015.

The order contract calls for plant engineering, procurement and construction (EPC), which is rare among contracts involving Russian projects. MHI, as leader of the consortium, will be responsible for basic and detailed design work, equipment procurement and dispatch of technical advisors for installation and test operation. Sojitz will handle coordination between related parties and transport within Russia, leveraging its business experiences and track records in Russia. CNCEC will take charge of construction work.

Ammoni is a government-affiliated company jointly established by the Tatarstan government and Russia's Bank for Development and Foreign Economic Affairs (Vnesheconombank: VEB) in 2006. CNCEC is a major Chinese construction and engineering firm directly controlled by the State Council of China; the company has design and construction subsidiaries.

Demand for fertilizer is expected to continue expanding steadily worldwide due to rising food production in response to global population growth. In Russia, the world's largest natural gas producer, interest in fertilizer production is increasing as the country seeks higher value from its natural gas resources and pursues advances in industrial development and agriculture. The fertilizer plant construction project in Tatarstan is in line with these initiatives. MHI and Sojitz believe that the high evaluation made by Ammoni of its operational track record at a concurrent production plant in Malaysia, which was built by MHI, as well as Sojitz's cooperative relationship with Tatarstan established through a framework agreement between them, contributed largely to the award.

Russia is presently seeing demand rise for replacement of fertilizer plants that were constructed twenty to thirty years ago. MHI and Sojitz, building on the strength of this latest large-scale order, now look to conduct aggressive marketing activities in a quest to boost its presence in the fertilizer plant market while also targeting orders, both in Russia and worldwide, in the fields of synthetic gas and petrochemicals as well.