L&T wins 'significant' order to build 2.3 mn tonne urea plant in Australia

Diversified group L&T on Monday said it has secured a "significant" order from Perdaman Chemicals & Fertilisers to build a 2.3 million tonne urea plant in Australia.

On completion, this facility will be the largest urea plant in Australia and one of the largest in the world, the company said.

Without disclosing the deal value, L&T said it was a "a significant order". Generally, significant order indicates a value between Rs 1,000 and Rs 2,500 crore.

"We've adopted a policy to not reveal commercial details of contracts as the value can change by the time of completion," L&T Group Chairman and Managing Director-Designate, SN Subrahmanyan said.

The contract has been awarded by Italian firm Saipem & Clough -- the Engineering, Procurement, and Construction (EPC) contractor of Perdaman, which is an Indian-owned company.

L&T' Energy Hyrdocarbon contract involves fabrication and supply of process and piperack modules for the 2.30 MT per annum urea plant along with a 1.3 MT ammonia unit.

L&T Heavy Engineering has secured orders for packaging the urea equipment for the project.

The facility will come up in the Burrup Peninsula in Western Australia and, on completion, will be the largest urea plant in Australia and one of the largest in the world, Perdaman Chairman Vikas Rambal told reporters here.

Subrahmanyan said the plant will also be the largest modularised and pre-fabircated unit in the fertiliser industry globally, which will be built at the L&T's yards at Hazira and Kattupalli near Chennai before being transported to Australia, where the parts would be assembled.

"We've chosen to go the modular way because of the extremely high labour costs, coupled with labour scarcity. Even here we are finding it difficult to get skilled labour, and this will be the way for our industry going forward," Subrahmanyan said.

When asked what could be the cost saving by doing the work here, he told PTI the contract value would go up by at least three times just from a labour and material cost point of view if the work was to be done in Australia.

The scope of the contract comprises about 50,000 tonne of modules -- which will be fabricated at L&T's Kattupalli facility -- to be delivered in 32 months.

Further, L&T Heavy Engineering has secured multiple orders for the complete package of urea equipment for this project. The equipment to be supplied consists of urea reactors, carbamate separators, carbamate condensers and urea strippers and these units will be custom-built at their Hazira facility, Subramanian Sarma, Senior Executive Vice-President for Energy at L&T, said.

The scope of this part of the contract comprises about 1,160 tonne of equipment to be delivered in 25 months, he added.

Australia does not manufacture urea even though its annual consumption is around 2.5 MT, Rambal said.

Based in Western Australia, Perdaman has investments in the fertiliser sector, shopping centres, and pharma companies, among others.