Orpic plans strategic fuel reserves in the Sultanate

By Conrad Prabhu — MUSCAT: MARCH 11 – Orpic, the Sultanate’s refining and petrochemicals flagship, is planning to establish fuel depots at strategic locations in the country, according to a top official of the wholly state-owned company. Ahmed al Jahdhami (pictured), Chief Executive Officer, said one such strategic fuel reserve is planned at Al Jifnain (just outside Muscat Governorate) where Orpic Logistics LLC, the partnership of Orpic and Spanish fuel transportation and storage specialist Compañía Logística de Hidrocarburos (CLH), is building a major fuel storage and distribution terminal.

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Ahmed al Jahdhami, Orpic CEO

“We are working with the government on our project called ‘strategic reserves’ in Al Jifnain and other areas,” Al Jahdhami said. The official made the revelation at the Oman & Italy Business Forum 2017, which was held last Wednesday to spotlight opportunities for In-Country Value (ICV) development linked to the implementation of part of Orpic’s mammoth $6.4 billion Liwa Plastics Industrial Complex (LPIC) at Suhar. The event showcased, among other things, opportunities associated with Italian-based technology giant Maire Tecnimont’s $888 million contract for the execution of Package 2 of the LPIC project, covering the construction of polyethylene and polypropylene plants.
In his presentation — his first public engagement since taking over as Orpic CEO with effect from January 1, 2017 — Al Jahdhami said the Muscat-Suhar Product Pipeline project, which includes the centrepiece Al Jifnain Terminal, is due for completion this year.
The MSPP project connects Orpic’s Mina Al Fahal (MAF) refinery in Muscat with its Suhar refinery via a bidirectional 290 km multi-product pipeline to an intermediate distribution and storage facility in Al Jifnain. The overall project is made up of three distinct components: A 40 km section linking MAF with Al Jifnain Terminal; a 30 km section connecting Al Jifnain Terminal with Muscat International Airport, and 220 km section connecting Suhar Refinery with Al Jifnain Terminal.
Upon completion, most of the refined fuels will be distributed from Al Jifnain Terminal — a move that will also help reduce road fuel tanker traffic between Muscat and Suhar. The MSPP fuel storage and distribution infrastructure, the CEO said, is one of three ‘growth projects’ currently under implementation by Orpic with an investment that will raise the company’s total asset base to $12 billion, up from $4 billion. It will also improve the overall profitability of the group, he noted.
Similarly, the Suhar Refinery Improvement Project (SRIP), slated for commissioning in summer, is driven by a desire to improve the overall environmental safety features of Orpic’s flagship refinery, in addition to meeting strong demand growth in automotive fuels and refined petroleum products, Al Jahdhami said. Additionally, the upgrade will dramatically reduce Orpic’s dependence on imported feedstock for its aromatic and polypropylene units.
But the biggest of the ‘growth projects’ is the Liwa Plastics Industrial Complex, comprising a Natural Gas Liquids plant in Fahud, a steam cracker in Suhar, a pipeline linking the Fahud and Suhar facilities, and polyethylene and polypropylene plants also at Suhar. The giant venture will not only increase Orpic’s product portfolio, but also boost the company’s profitability, Al Jahdhami said.
Importantly, LPIC will also give rise to the establishment of an in-house marketing arm dedicated to the marketing of the project’s polyethylene and polypropylene output, the CEO said.