SCI

SCI: has signed a 35/65 JV with Takamul Investment Co, a subsidiary of Oman Oil Co, to develop centralized utilities facilities for the Duqm Special Economic Zone (SEZ), set to be one of the world’s largest major industrial and commercial hubs. The JV, named, Centralised Utilities Company (CUC), will serve as a one-stop provider of a range of centralised utilities such as power, steam, water, sewerage treatment and on-site logistics on a captive basis to multiple industrial customers in the Duqm SEZ in southern Oman. CUC’s customers will include anchor customer Oman Oil Co, which is developing a 230k bpd refinery targeted to begin operations in 2018 as well as a petrochemical complex on the site. CUC will have an initial share capital of OMR1m (~$3.2m), of which SCI’s 35% stake will be funded through internal resources. Separately, SCI celebrates the official opening of its US$1b Salalah Independent Water and Power Plant (IWPP) in Oman, which commenced full commercial operation in May 2012. Recall, the facility consists of a gas-fired power plant with a total gross capacity of 490MW and a seawater desalination plant with a total water production capacity of 69k cubic metres per day. It will provide power and water under a 15-year power and water purchase agreement with the Govt of Oman. SCI trades at 11.9x P/E. The Street has mostly Neutral or Buy ratings on the stock, with TP btwn $4.80- 6.00.