Oman Observer

Refinery project at Duqm to create energy-based growth pole in Oman

By Conrad Prabhu — MUSCAT: April 10 – Yesterday’s landmark deal by the national energy investment companies of Oman and Kuwait to jointly develop a major refinery at Duqm is set to catalyse major investments in a wide array of energy-related support infrastructure on the Sultanate’s Wusta coast. This infrastructure, encompassing a giant crude storage park, product storage and export terminal, gas pipeline network, liquid jetty, and related transport and logistics capacity, can be leveraged to aid the Sultanate’s transformation into a formidable energy player in the region, say officials.
According to Yousuf al Jahdhami, Project Director — Duqm Refinery & Petrochemicals Complex, the 230,000 barrels per day capacity refinery is the centrepiece of a wider mosaic of investments extending well beyond the boundaries of the 900 hectare complex.
National gas transportation utility Oman Gas Company, for instance, is building a 221-kilometre pipeline that will carry natural gas from Saih Nihayda in central Oman all the way to the Special Economic Zone (SEZ) at Duqm.
Part of this gas will be utilized by the centralized utilities operator Marafiq, a 65:35 joint venture between Takamul Investment Co (wholly owned by Oman Oil Company) and Sembcorp Utilities Oman. A captive power and water plant to be developed by Marafiq will offer 183 MW of electricity generation capacity and 1500 cubic metres per hour of process water for the refinery.
Likewise, Oman Tank Terminal Company (OTTCO), a wholly owned subsidiary of Oman Oil Co, is developing a massive crude oil storage park on a 1600 hectare site at Raz Markaz, around 80 km south of the Duqm SEZ. An integral part of the Duqm SEZ, the crude park is being developed in coordination with the SEZ Authority at Duqm (SEZAD).
Meanwhile, the financial bids for the two main packages covering the Engineering-Procurement-Construction (EPC) of the refinery project are currently under evaluation, said Al Jahdhami. A report on the merits of the bids will be submitted to Oman Oil Company’s Board of Directors next month.
According to Yahya Khamis al Zadjali, Head of Strategic Planning at SEZAD, around 75 per cent of the estimated RO 800 million ploughed thus far into the SEZ’s infrastructure development is geared towards supporting the growth of a hydrocarbon-based industrial and petrochemicals industry in Duqm.
This includes investments in a Bulk Liquid Terminal at Port of Duqm for the handling of crude feedstock for the refinery, and the export of refined petroleum products and petrochemicals.  Reclamation works will involve the use an estimated 27 million cubic metres of soil for the construction of jetties and terminals. A variety of storage tanks will be constructed at these terminals, he said.
Additionally, SEZAD will invest in the construction of a road connecting the SEZ with the Ras Markaz crude park.  A crude pipeline linking Ras Markaz with the Duqm Refinery is envisaged as well, he said.