China’s recent proposal to build a refinery at the central Omani town of Duqm is facing delays due to government red tape, according to a source close to the project.

In August, Chinese group Oman Wanfang, which is spearheading the development of a $10.7bn industrial city in Duqm announced plans for a 230,000 barrel-a-day refinery mirroring the Omani-Kuwaiti venture to build a refinery with the same capacity in Duqm.

Duqm Refinery, which is awaiting financial close awarded three engineering, procurement and construction packages worth $5bn last month.

The Chinese group, which secured a 50-year usufruct agreement with the Special Economic Zone at Duqm (Sezad) was reported to be in talks with Omani and other Gulf oil and gas ministries to secure crude for its planned refinery.

A source with knowledge of the project said that China’s refinery plans for Duqm are primarily to process crude secured from Nigeria.

Asia’s biggest crude buyers China and India have begun signing contracts with the Nigerian National Petroleum Corporation to secure supplies to replace politically-sensitive Iranian oil.

Beijing, in particular, has expressed interest in building refineries in the West African country to process crude and the latest refinery in Duqm is part of a plan to shipment time between Africa to China.

The refined crude will be primarily for Chinese consumption, added the source. China currently buys over two-thirds of Omani crude.

However, the Chinese company has been frustrated by the Omani government’s slow approval process for its refinery plan.

“The refinery would take at least five years to complete. We’re still waiting for government approvals.

We’re happy to start work and provide financing should approval come quicker,” said the source close to the project.

In August, Oman Wanfang chairman Ali Shah said that the Chinese Association for Chemicals was conducting a feasibility study for the refinery project, which will be completed in a year. He said the firm would likely tap into Oman’s upcoming $5bn Ras Markaz crude storage park - the world’s largest - which is currently evaluating bids.

Oman Wanfang, which is a consortium of six Chinese firms has plans to develop 25 new projects in Duqm in the planned China-Oman Industrial Park, with an investment outlay of $10bn over 10 years. Ten companies signed a land lease agreement for projects in sectors such as infrastructure and utilities, roads, power and water projects with a total investment of $3.06bn last month.

After completion of feasibility studies, more Chinese firms are likely to sign land agreements with Sezad with all projects set for a 2022 completion date.