Duqm Refinery, a 50:50 partnership of Oman Oil Company and Kuwait Petroleum International (KPI), hopes to close the financing of its estimated $7 billion grassroots refinery project in Duqm Special Economic Zone (SEZ) within the next two months, according to a high level official.
Hilal bin Ali al Kharousi, (pictured) Executive Managing Director of Oman Oil Duqm Development Company — one of the four verticals of the revamped Oman Oil Company, said international lenders have evinced keen interest in the financing of the giant scheme.
“We are presently in the midst of the financing of the project, and we see a lot of interest from international banks and credit agencies to support this project. We hope to close financing within the next month or two,” said Al Kharousi.
Al Kharousi, who is also Deputy Chairman of Duqm Refinery, made the comments at the Oman Business Forum, which was held in the city recently. The 230,000 barrels per day (bpd) capacity refinery, he noted, has been conceived and configured to serve as the cornerstone of a much larger refining and petrochemicals complex that will drive investment and economic development in the SEZ with beneficial implications for the wider economy.
“When we made the decision to implement the Duqm Refinery project, we decided to develop a refinery that is more distinctive from the other refineries schemes operating in the region. We therefore looked at the market demand dynamics, crude supply dynamics, technology, size and complexity of refineries, and so on. And we asked ourselves: Should it be a duplication of say, Suhar Refinery, or do we come up with something different. After all, its location in a greenfield zone would pose its own unique set of competitive challenges, and so.
Ultimately, we agreed that a petrochemicals complex at the downstream of the refinery would be our goal. Accordingly, we sized the capacity of the refinery suitable to feed a world-scale petrochemicals complex. Also in line with this goal, we decided not to be entirely dependent on Omani crude, but to process different crudes and also attract different markets as well. So we studied the markets, came up with a product portfolio and identified markets that would be interested in these products. With this object in mind, we set out to develop the Duqm Refinery project,” the Deputy Chairman explained.
With an investment of around $7 billion, the refinery represents the single largest Foreign Direct Investment (FDI) in an industrial project in the Sultanate, said Al Kharousi.
“We also decided to ensure that the size and complexity of the refinery will allow us to grow. It is the first refinery that will process mixed crude. Further, as a refinery that will process both import and export crudes, it will be different from the other refineries operating in the region,” he added.