Exclusive: Duqm refinery close to awarding EPC packages one and two

11 May 2017

Multi-billion dollar project is crucial to Oman’s diversification efforts

Duqm Refinery, owner of Oman’s largest single-phase project, has selected contractors and is preparing to award engineering, procurement and construction (EPC) packages one and two, according to sources close to the project.

Award of the contracts this month hinges on Kuwait’s Supreme Council of Energy’s ratification of the final investment decision committed to the refinery complex by Kuwait Petroleum International (KPI), which is scheduled to take place on May 27.

The Kuwaiti firm was signed on as joint venture partner last month after Abu Dhabi’s International Petroleum Investment Company (Ipic) exited the estimated $7bn project last year.

Should the council decide to reschedule its meeting, the award of the first two packages will be postponed to September, according to a source familiar with the project.

MEED reported that teams formed by South Korea’s Daewoo and Spain’s Tecnicas Reunidas as well as UK’s Petrofac, Japan’s Chiyoda Corporation and South Korea’s Samsung Engineering were called in for further negotiations.

MEED understands that packages one and two will be awarded to separate consortiums.

The groups that bid for the oil processing facilities package are understood to be:

  • 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)

Bidders for the second package, covering facilities, utilities tankage and buildings that will support the process, are understood to be:

  • CB&I / CTCI
  • Hyundai Engineering & Construction (South Korea) / Hyundai Engineering (South Korea) / Itochu (Japan)
  • JGC / GS Engineering & Construction / Saipem
  • Petrofac / Samsung Engineering
  • Tecnicas Reunidas / Daewoo Engineering & Construction

The third package, which covers offsite facilities, including eight storage units from the world’s largest crude storage tank farm at Ras Markaz has received commercial bids.

The groups submitting commercial bids are as follows:

  • Tecnicas Reunidas /Daewoo
  • Petrofac /Samsung Engineering 
  • Saipem
  • Rotary Engineering (Singapore)
  • Kentz (Ireland/Canada)

The refinery at Duqm will receive 70 per cent of its crude from Kuwait and the remainder from Oman.

Once commissioned, the refinery is set to produce diesel, jet fuel, naphtha, liquefied petroleum gas, sulphur and pet coke as its primary products, to be traded from the adjacent port at Duqm.

MEED reported that the refinery was looking for more partners, and was leaning towards East Asian firms.

The project to build the refinery at Duqm is part of the sultanate’s efforts to diversify its economy by developing the central Omani town as an energy and logistics hub. Similar efforts are also underway at the port towns of Sohar and Salalah.

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