Conrad Prabhu –
Muscat, April 10 –
Having secured GCC refining heavyweight Kuwait Petroleum International (KPI) as a joint venture partner in the construction of a world-scale refinery at Duqm, Oman Oil Company — the wholly government-owned energy investment firm — has kicked off feasibility studies covering Phase 2 of the ambitious venture focusing on the development of an equally substantive petrochemicals complex.
In an early shot in the arm for the Phase 2 development, Kuwait Petroleum International — the 50:50 joint venture partner along with Oman Oil Company in the $7 billion Duqm Refinery project — has affirmed its keen interest to participate in the downstream petrochemicals complex, subject to the outcome of the feasibility study.
“We are committed to the feasibility study, and have begun a detailed feasibility study with our partner (Oman Oil Company),” said Bakheet Shabib al Rashidi, CEO — Kuwait Petroleum International Ltd (KPI). “Based on the results — and we are expecting the results to be positive — we are committed to (being part) of the project as much as we can.”
Al Rashidi made the comments during a press briefing held soon after yesterday’s signing of landmark partnership agreements with Oman Oil Company for the development of Phase 1 of the Duqm Refinery & Petrochemical Complex — centring on a 230,000 barrels per day capacity greenfield refinery.
“We are relying on the integration of the (proposed) petrochemicals complex with the refinery operations,” the Kuwaiti official noted. Plans drawn up by Oman Oil Company envisage a mammoth petrochemicals complex featuring as many as 10 large-scale plants located around the anchor refinery. This sprawling array of plants is anticipated to produce over 20 products ranging from commodities to specialty products, serving as feedstock for a potential 30-plus chemical processing businesses to be set up further downstream of the value chain.
Earlier, Al Rashidi said crude feedstock for the Duqm Refinery will come from Kuwait and Oman in the ratio 65:35. However, the refinery has been designed to process a variety of other crudes sourced from international markets. The JV company is open to receiving international crude feedstock that add value to the refinery project, he stated.
Commenting on the financing of the Duqm Refinery, Hilal al Kharusi, Executive Managing Director — Oman Oil Company, said 60-65 per cent of the total project cost estimated at $7 billion will constitute the debt component, while the remainder will be generated via equity from the two partners. A large number of lenders, comprising a mix of local, gulf, Islamic and international banks, have been lined up to provide debt finance for the project, while international credit agencies have been tapped by contractors bidding for the key project packages, he said. Financial close is targeted before the end of this year, Al Kharusi stated.