Promising potential: ‘Our customer profiles will increase from 500 presently to more than 3,000, representing a significant increase in our market portfolio’
Liwa Plastics — Oman’s biggest petrochemicals project to date — is set to dramatically ramp up the global market portfolio of OQ, the Sultanate’s integrated energy company, when the $6.7 billion complex comes on stream at Sohar Port next month.
According to a high-level executive of wholly government-owned OQ, a stream of new petrochemical and polymer products from Liwa Plastics will bolster OQ’s already sizable portfolio and market footprint.
Talal al Awfi , CEO – Commercial at OQ, noted that Liwa Plastics’ commercial launch will not only boost output of polypropylene and polyethylene, but it will also contribute significantly to the growth of OQ’s international markets.
“Currently we have 60 countries in our market portfolio, which will increase to more than 100 (post-launch), while our product grades will increase from 10 to over 50. Our customer profiles will also increase from 500 presently to more than 3,000, representing a significant increase in our market portfolio,” said the official.
Al Awfi’s observations came during a webinar hosted recently by The Business Year (TBY) on the theme, ‘Oman Downstream Petrochemicals Potential’. Also taking part in the online forum were Ahmed al Jahdhami, CEO — Downstream at OQ; Abdulrahman al Yahyaei, CEO — Oman Society for Petroleum Services (OPAL); and Eng Khalid al Mushaileh, Downstream Petroleum Expert.
At full capacity, Liwa Plastics will boost OQ’s production of polyethylene and polypropylene to 1.4 million tonnes. The product portfolio will include linear Low-Density Polyethylene (LLDPE), High-Density Polyethylene (HDPE) and Polypropylene (PP) — part of a product portfolio that will enable OQ to meet the growing global demand for polymers.
The mega project’s imminent launch, said Al Awfi, will not only drive up OQ’s petrochemicals output, but also expand the integrated energy conglomerate’s marketing reach globally.
“We have successfully developed our trading arm globally and replicated this to our marketing arm internationally. We also have the benefit of having access to (the expertise of) an already established subsidiary OQ Chemicals (formerly Oxea). So we are trying to not necessarily replicate but also grow the model.”
Earlier, he acknowledged that market uncertainty and volatility associated with the global economic downturn and pandemic had varying degrees of impact on the downstream petrochemicals industry internationally. Amid these challenges, companies are learning to survive by optimising their costs, initiating lean programmes and diversifying across the value chain.
OQ, for its part, has also been looking to diversify its downstream value chain, as illustrated by its investment in the Sultanate’s first cracker as part of the Liwa Plastics project, he said.
“This hopefully will minimise the impact going forward. We also have initiated a number of initiatives to manage the significant risk we are all going through,” Al Awfi stated.
Nevertheless, the Sultanate represents an attractive destination for foreign direct investments (FDIs), the CEO said. “Oman has put in place the platform to attract FDIs; it has made good investments in infrastructure, the crown jewel being Duqm representing 2,000 sq km of free trade zone. It also has access to young talent. The Oman Vision 2040 targets a ranking for the country among the Top 20 destinations for FDIs. Indeed, all the enablers are in place to attract FDIs in this sector,” he added.
CONRAD PRABHU
@conradprabhu
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