Contracts awarded for $7 bn Duqm Refinery project

Duqm Refinery, a joint venture of Oman Oil Company (OOC) and Kuwait Petroleum International (KPI), has notified three international groups of its intent to award a number of packages that together constitute the estimated $7 billion refinery project and associated infrastructure planned for implementation at the Special Economic Zone (SEZ) at Duqm.
In all, three large multi-billion dollar packages were up for grabs, each of them for execution on an Engineering, Procurement and Construction (EPC) basis. The first of these packages, labelled EPC 1, and comprising the main process units of the refinery, went to the consortium of Tecnicas Reunidas (Spain) and Daewoo Engineering & Construction (S Korea).
The second package, dubbed EPC 2 — covering the construction of utilities and offsite facilities — was awarded to the joint venture of Petrofac (UK) and Samsung Engineering (S Korea).
Italian oil and gas contractor Saipem International was named the collective winner of three other components of the mammoth refinery projects, collectively designated EPC 3. These entail the construction of a product storage and export terminal at Duqm Port (EPC–A); eight storage tanks at Ras Markaz (EPC 3–B) where a giant crude oil storage park is planned; and an 80 km crude oil pipeline from Duqm SEZ to Ras Markaz (EPC 3-C).
International multi-disciplinary consultancy services provider Amec Foster Wheeler was named the Project Management Consultant for the EPC phase of the refinery project.
The awards, which are subject to the all-important notice-to-proceed expected later this year in conjunction with financial close, mark an end to a keenly contested tendering phase, which began in November 2015. Then, Duqm Refinery invited international companies and their local partners to prequalify for Packages 1 and 2 of the project, which was followed by Package 3 in December 2016.
Pending the award of the EPC contracts, Duqm Refinery gave the green light for the preparation of a 900 hectare site at the SEZ. An army of around 1,300 workers, backed by 850 piece of earthmoving equipment, were involved in site preparation works involving around 12 million cubic metres of earth works and other services.
Once operational in 2021, the refining capacity will reach 230,000 barrels per day and will produce a number of key refinery products: diesel, jet fuel, naphtha and liquefied petroleum gas.
Meanwhile, Petrofac said the EPC 2 package awarded jointly with Samsung Engineering is worth approximately $2 billion. Work on the 47-month project will commence shortly, subject to financial closure and full notice to proceed from Duqm Refinery, it said.
Petrofac’s and Samsung’s scope of work includes engineering, procurement, construction, commissioning, training and start-up operations for all the utilities and offsites at Duqm.
E Sathyanarayanan, Group Managing Director, Engineering & Construction, commented: “This significant project represents our twelfth in the country and serves to reinforce Petrofac’s commitment to one of our core markets; one in which we have been present since 1988. Furthermore, it provides a valuable opportunity for us to continue to increase in-country value through engaging with the local supply chain and recruitment of local resources. “We are very much looking forward to working with Samsung on this project and growing our relationship with Duqm Refinery.”
Duqm Refinery and Petrochemical Industries Company LLC is a Joint Venture (JV) between Oman Oil Company (OOC) and Kuwait Petroleum International (KPI). This strategic partnership between OOC and KPI has been established in the incorporation of Duqm Refinery, based in Al Duqm.
This gives the project a strategic maritime location and a competitive advantage being in the path of international shipping lines in the Indian Ocean and the Arabian Sea thus easing the process of transport in and out of the region.