Banks are expecting a major loan for Oman’s $6bn Duqm Refinery to be syndicated in the second half of 2016.

France’s Credit Agricole is the financial adviser.

Duqm Refinery & Petrochemical Industries Corporation (DRPIC), a joint venture of Abu Dhabi’s International Petroleum Investment Company (Ipic) and Oman Oil Company, has begun contacting export credit agencies (ECAs).

ECAs will be essential to support the multibillion-dollar financing. 

Informal discussions with local and international banks are expected to start shortly.

Bids were submitted for the two main packages for the 230,000 barrel-a-day (b/d) Duqm refinery in March.

However, doubts remain over the feasibility of the scheme in the current oil price environment.

Ipic’s projects in the UAE have slowed. The firm received bids for the Fujairah Refinery and Emirates LNG terminal in early 2015, but awards have not yet been made.

MEED also reported in February that the Tacaamol aromatics chemicals complex in Abu Dhabi, in which Ipic holds a minority stake, is delayed after a Thai shareholder pulled out.

DRPIC will also find that pricing is much higher than Oman Oil Refineries & Petroleum Industries Company (Orpic) secured on its $5.2bn Liwa Plastics Complex project. Banks committed to the very successful project finance deal in 2015.

Since then, Oman’s sovereign rating has been downgraded to A3 negative by Moody’s Investor Services and BBB-/A-3 stable by Standard & Poor’s, both of the US.

Oman has also seen banking sector liquidity fall in the last six months as a consequence of lower government oil revenue. Pricing is expected to have risen considerably, which will affect transactions in the second half.

Bidders for Duqm refinery’s oil processing facilities package are understood to include:

• CB&I (Netherlands-based) / CTCI (Taiwan)
• JGC (Japan) / GS Engineering & Construction (South Korea) / Saipem (Italy)
• Petrofac (UK) / Samsung Engineering (South Korea) / Chiyoda (Japan)
• Tecnicas Reunidas (Spain) / Daewoo Engineering & Construction (South Korea)

The same consortiums are thought to have bid on a second package, with the addition of South Korea’s Daelim/Hyundai Engineering & Construction/Hyundai Engineering. It covers supporting facilities, utilities tankage and buildings.