Foundation stone laid for $1bn Salalah projects

Oman Oil Company (OOC), the Sultanate’s investment arm in the oil and gas sector and energy-related projects, celebrated laying the foundation stone for both the Salalah LPG and the Salalah Ammonia projects. The ceremony was held under the auspices of Dr Mohammed bin Hamad al Rumhy, the Minister of Oil and Gas, and the Chairman of Oman Oil Company, and attended by a number of dignitaries from the government and private sectors.

The Salalah LPG project and the Salalah Ammonia project are both of national and strategic importance. These projects are expected to contribute significantly to the development of the industries in the Governorate of Dhofar, in addition to supporting the economic diversification vision of the Sultanate. They reflect OOC’s growth strategy to further enhance the added value in the midstream and downstream of the Oil and Gas sector; and contribute towards advancing existing and future petrochemical industries in the Sultanate.
Commenting on this occasion, Eng Isam bin Saud al Zadjali, Chief Executive Officer of OOC, said “This is an important moment for us as OOC, where we continue to expand our investment portfolio locally, playing a vital role in being part of the Economic Zones across Oman.”
He continued, “We, as an investment arm of the country, strive to develop and invest in successful and sustainable economic projects in the energy and related fields in Oman and abroad. Thus, such projects maximise use of local resources and job opportunities as well as enhance the leadership competencies in our country. The vision of the Sultanate to promote investments in projects, in addition to supporting development plans aimed at diversifying sources of national income in the long term. Therefore, Salalah Liquefied Petroleum Gas (LPG) and Salalah Ammonia projects are part of Oman’s integrated development plan to diversify its investments.”
Highlighting the importance of Salalah LPG project, Sultan bin Hamed al Burtmani, Acting Executive Managing Director of Oman Gas Company (OGC) said “SLPG is a strategic and pivotal investment with far-reaching for Oman and thereby advancing the nation’s development in terms of economic development and securing LPG supplies to the governorate. The project will also help portray OGC’s role in utilising natural gas to develop various downstream industries and creating job opportunities for Omanis. We are excited to see the project moving ahead at a rapid-and- steady pace and on schedule.”
“Salalah LPG has the potential to create a new energy hub in Salalah centring on the production of liquefied petroleum gas (LPG) — a commercially valuable, low-carbon and economically competitive fuel that enjoys growing demand in domestic and international markets,” Al Burtmani added.
Awadh al Shanfari, Managing Director of Salalah Methanol Company stated: “The Ammonia Project is a result of a wider plan to invest in sustainable growth of the national downstream industries. This project paves the way for future opportunities in Oman for the development of downstream industries and thus, maximise their value addition. The project will also harness in-country value, with a strong focus on the development of local resources and engage the local supply chain”.
Salalah LPG exemplifies a longstanding endeavour by Oman Gas Company (OGC), a wholly owned company by OOC. The projects fall in line with the overarching strategic vision of the company, and thus, the establishment of Salalah LPG was announced, as a new building block in its expanding portfolio of midstream assets. The plant is located in the Salalah Free Zone adjoining the Port of Salalah, an important transhipment and logistics hub on the Indian Ocean.
The Salalah LPG project is a strategic $826 million investment, developed on approximately 20 hectares of land within Salalah Free Zone. The main LPG Extraction Plant will offer a processing capacity of around 8.8 million standard cubic metres per day of gas — a capacity commensurate with world-scale LPG plants. The UK-based international contractor Petrofac was awarded a lumpsum EPC contract to construct the LPG extraction plant. LPG and Condensate Storage Facilities will be built at the nearby Port of Salalah on approximately 8 hectares. The plant will have local LPG truck loading facilities catering to domestic, industrial and commercial demand in Dhofar Governorate.
Together with a dedicated export jetty, the Port of Salalah will become an international LPG and condensate export hub beginning 2020 when the project is fully operational.
Salalah LPG will effectively contribute towards a competitive and sustainable local supply market, and further support our commitment to the export of reliable and uninterrupted LPG gas and condensate products.
Salalah Methanol Company is building an Ammonia plant, adjacent to the existing Methanol plant in an effort to diversify the existing methanol production by expanding into Ammonia production. The overall cost of the project is $463 million which is expected to be completed by the year 2020.
The feed stock of the plant is natural gas, supplied by the Ministry of Oil and Gas through Oman Gas Company, a wholly owned company by Oman Oil Company.