ABU DHABI, UAE, Feb. 23 /PRNewswire-FirstCall/ - Alcan Inc. (NYSE, TSX:
AL) announced that it has signed a Shareholders' Agreement today with the Oman
Oil Company S.A.O.C. (OOC) and the Abu Dhabi Water and Electricity Authority
(ADWEA) in the development of a proposed 325-kilotonne per annum aluminum
smelter project in Sohar, Oman. In June 2004, Alcan announced that it is
committed to a 20 percent stake in the Sohar Aluminium Company L.L.C., with
OOC and ADWEA each owning a 40 percent share.
    The agreement was signed in Abu Dhabi by H.H. Sheikh Diab Bin Zayed Al
Nahyan, Chairman of the Abu Dhabi Water and Electricity Authority, H.E.
Maqbool Ali Sultan, Minister of Commerce and Industry and Chairman of OOC, and
Cynthia Carroll, President and Chief Executive Officer, Alcan Primary Metal
Group.
    H.H. Sheikh Diab Bin Zayed Al Nahyan said, "This strategic project
represents a landmark stage in the path of bilateral brotherly joint
cooperation between Abu Dhabi Government and the Oman Sultanate. We have the
pleasure to cooperate with globally renowned companies like Alcan. The
signature of the agreement shall mark the launch towards the construction of
the Sohar Aluminium which we anticipate to be one of the major projects in
this field." His Highness further explained, "The expansion of ADWEA
commitments to involve other economical activities is a result of ADWEA's
interaction with modern market economies, and the sustainable success of its
projects being executed within its privatization program, noting that Sohar
Aluminium is dependent on the power plant. ADWEA is presently involved in
common projects with other countries of the region which shall set the
preliminary platform for the prospective GCC economical integration."
    "With this joint venture, we believe that Alcan will provide the finest
technology services to implement AP35 Technology for the smelter. This project
will put forward employment opportunities in different fields within the
Battinah coast, and highly technical jobs of international standards, both
bringing added value to Oman," said H.E. Maqbool Ali Sultan. "We are pleased
to be associated with Alcan and ADWEA in the Sohar Aluminium project," His
Excellency added.
    "Today marks an important step for Alcan in consolidating our partnership
in this project, further demonstrating our leading position in smelting
technology, as well as enhancing our low-cost position," Cynthia Carroll said.
"Furthermore, we are proud to develop and expand the scope of our aluminum
production to this growing and dynamic region of the world, contributing to
maximizing value for our shareholders," she added.
    Sohar was formed on September 15, 2004 to own and operate the new
aluminum smelter, which will be based adjacent to the existing Sohar
Industrial Area. Sohar will build a single AP35 potline, together with
associated carbon and casting facilities and an 800MW gas fired power station.
This will be the first time that proven AP35 Technology is used in a
greenfield smelter. A second potline of similar capacity is planned to be
established in the future. The new smelter will provide a major economic boost
to the Al Battinah Region of Oman.
    Under a technology transfer agreement concluded the same day, Alcan will
provide Sohar with a license and related technical services necessary to
implement Alcan's AP35 Technology. ADWEA will be providing technical services
and management support for the power plant.
    The bids for the Engineering Procurement Contract (EPC) Management for
the smelter are currently being evaluated; a response to the power plant EPC
tender is expected shortly. At present, Sohar is recruiting its management
team to oversee the construction and operational phases.
    The decision as to when the venture closes financially is expected in the
second half of 2005, as well as a final construction approval date.
Construction activities will begin shortly thereafter, with full production
expected by 2008.

    Alcan is a multinational, market-driven company and a global leader in
aluminum and packaging, as well as aluminum recycling. With world-class
operations in primary aluminium, fabricated aluminum as well as flexible and
specialty packaging, aerospace applications, bauxite mining and alumina
processing, today's Alcan is well positioned to meet and exceed its customers'
needs for innovative solutions and service. Alcan employs 73,000 people and
has operating facilities in 56 countries and regions.

    Oman Oil Company S.A.O.C. (OOC) is a commercial company 100 percent owned
by the Government of the Sultanate of Oman. The company was created in 1992 to
give the Government another vehicle for pursuing investment opportunities in
the energy sector both inside and outside Oman. Through participation in
energy and energy related projects, OOC plays a role in the Sultanate's
efforts to diversify the Omani economy and help generates Omani and foreign
private sector investment. In Oman, OOC has interest in numerous projects that
are either in operation, under construction or under development. These
include gas transmission, petroleum retailing, refining, petrochemicals and
aluminum smelting. Outside Oman, OOC has interests in exploration and
production, crude oil pipelines and petroleum product logistics. For further
information on OCC, please visit http://www.oman-oil.com .

    In March 1998, ADWEA was established with the principal goal of managing
and privatizing the Water and Electricity sector in the emirate of Abu Dhabi.
Since 1998, ADWEA has developed projects with a total installed electricity
and water production capacity of 7100 MW and 500 MIGD, through an aggressive
IWPP program. Of these projects, two have been commissioned, two are near
completion and the fifth is currently out for tender. This highly successful
IWPP program was designed to attract foreign investors to build, own, and
operate new or enhanced generation facilities. ADWEA is the 60 percent
shareholder in these projects and the foreign investor is granted a 40 percent
share of the ownership interest.

    Statements made in this press release which describe intentions,
    expectations or predictions may be forward-looking statements within the
    meaning of securities laws. The parties caution that, by their nature,
    forward-looking statements involve risk and uncertainty and that actual
    results could differ materially from those expressed or implied in such
    statements. Reference should be made to Alcan's most recent Form 10-K for
    a summary of major risk factors.

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