More partners could be added to develop Oman’s largest single phase project at Duqm, according to a senior executive at Oman Oil Company.

Kuwait Petroleum International recently signed a joint venture agreement with Oman Oil Company to develop the 230,000 barrel-a-day refinery in the southern port city.

The Kuwait Petroleum Corporation subsidiary replaced Abu Dhabi’s International Petroleum Investment Company, which exited the project last year.

The $7bn refinery is looking to secure a loan for $5bn from international and local lending institutions.

Speaking with MEED ahead of the signing ceremony Oman Oil Company Duqm Development Company executive managing director Hilal al-Kharusi said the project is looking for financial closure by year-end and welcomed more investors.

“We welcome new investors for Duqm refinery, if they add value to the project. We have two strategic partners – Kuwait Petroleum and Oman Oil Company, so any partner who would come in would add value to the project in a different manner, not just looking for financial investors,” he said.

“The arrangement is 50:50 as of today and any new partner can be brought in from either side. We are aiming to crack everything – including financial close by end of the year,” he added.

Financing for the project will require a mix of equity from shareholders as well as domestic and foreign borrowing.

“We’re looking at equity from the shareholders, regional and local and Islamic banks, and credit agencies. So for a project of this size, it’s a mix of everything. Credit agencies take part, international banks take part, the shareholders also take part,” said al-Kharusi.

The refinery at Duqm, which is currently evaluating bids is set to produce diesel, jet fuel, naphtha and liquefied petroleum gas.

Al-Kharusi added that some of the products will be channelled into manufacturing petrochemicals and the refinery will look to export to markets such as India.

“There are about six products – two of the products will be fed into petrochemicals and the others will be consumed regionally like diesel, jet fuel and so on and some products such as pet coke will be exported to India – which is one of the largest users of pet coke for power, cement,” he said.

MEED reported that Duqm refinery has shortlisted two consortia for the engineering, procurement and construction contract for phase one of the project, which includes a package for oil processing facilities.

Bids have also been submitted for the second package covering facilities, utilities tankage and buildings to support process.

MEED also reported that the final package of the project, which includes the development of the region’s largest crude tank farm at Ras Markaz received technical bids.

The development of Duqm refinery forms part of Oman’s efforts to diversify its economy, through integrated energy and logistics projects in towns such as Sohar and Salalah.