Tecnimont announced yesterday that it had signed a memorandum of understanding (MOU) with Fatima Group and Midwest Fertilizer Company to negotiate a lump sum, turn-key engineering, procurement and construction (EPC) contract to build the Mt Vernon fertilizer complex.
The press release is here, and I’ve updated my research note with full information about Midwest Fertilizer (including some comments on their financing activities in Pakistan, which supposedly caused exchange rates to spike because they were sending so much money out of the country).
Tecnimont valued the EPC scope of work at $1.6 billion; the last total cost reported for the Mt Vernon fertilizer complex was $2.4 billion. The press release suggests that financial close could come in September 2014, after which a 36-month construction period would see the plant operational in the fourth quarter of 2017.
You could ask: why issue a press release about a MOU? Why not just do the negotiation and then announce the full EPC contract? My best guess would be that some confidence issues remain with Fatima’s partners, and a public affirmation like this may (or may not) help them to seal their financial deals.
In other news, Midwest’s air permit was approved in June, and the water permit is in its public comment period. All sources are linked from the Mt Vernon – Midwest Fertilizer Company page.