Duqm refinery seeks new investor

02 June 2016

Existing investors looking to spread costs

Oman Oil Company (OOC) and Abu Dhabi’s International Petroleum Investment Company (Ipic) are seeking a third investor for their $6bn Duqm refinery project, sources have told MEED.

Oman-based Duqm Refinery & Petrochemical Industries Company (DRPIC) is a 50:50 joint venture created to develop the refinery in 2009.

The new equity investor could be an international oil company (IOC) with refining expertise, or an investment fund, finance experts say.

The Special Economic Zone Authority at Duqm (Sezad) signed a memorandum of understanding with China’s Wanfang Investment Management Company in May for a series of investments in Duqm. This includes a 230,000 barrel-a-day refinery, although it was not specified that this would be DRPIC’s project.

Lower oil prices mean oil firms and state-owned investment vehicles have reduced levels of available funds for investments. Several Ipic schemes in the UAE have slowed. A third investor for DRPIC would spread the equity burden of the initial capital investment.

Neither OOC nor Ipic responded immediately to requests for comment.

Firms submitted engineering, procurement and construction (EPC) bids for the Duqm refinery in March, and awards are expected in the second half of the year.

Bidders for the first package – covering oil processing facilities – are thought to include:

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. The work covers supporting facilities, utilities, tankage and buildings.

Omani banks are expecting DRPIC to seek a multibillion-dollar loan to finance the refinery in the second half of 2016.

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