Uralkali Starts Next Stage of Development Program for Its Own Generation Facilities

Uralkali (Berezniki, Perm Territory) has started the installation of gas-turbine units under its program for the construction of its own power generation facilities.

The development program for the Company's own power generation facilities provides for the construction of two 24-MW power plants at Uralkali's first and fourth mine divisions. Each power unit will be equipped with two Tsiklon gas turbine plants (GTS 400) and heat-recovery boilers. The gas-fired plants were produced by Siemens, Germany. The total investment in the construction of the Company's own power generation facilities at the first and fourth mine divisions is about 1.5 billion roubles. In December 2003, the European Bank for Reconstruction and Development (EBRD) extended to Uralkali a $75-million loan. Under the loan agreement, the bulk of that amount was channeled into the implementation of the electric power project.

The construction and assembly work related to the implementation of the electric power project was started in 2005. The general contractor for the project - MC Uralenergostroy (Yekaterinburg) - was selected from 16 companies on a bidding basis. To date, the initial construction phase has been completed at power plant construction sites of the first and fourth mine divisions, which included foundations and 60% of the frames of main buildings meant for the installation of turbines and process equipment. The two Siemens 90-tonne gas turbine plants have already been delivered to the Company's warehouse. The assembly and installation of these plants on the foundations will begin in the near future. Two more turbines are due to arrive in April.

Under the plan, the frames of main buildings are to be constructed after the assembly of walls and roofs in May 2006. Then, the contractors will start the installation and setting-up of the process equipment. At the power unit of the first mine division, they will install three additional steam boilers, which will significantly increase the unit's heat output. As a result, the power unit of Uralkali's first mine division will cover 100% of the demand for heat energy and 85% for electric energy. The commissioning of the power project facilities is scheduled for the forth quarter of 2006.

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