Foster Wheeler wins Duqm refinery design contract

25 March 2014

Front-end engineering and design on $6bn Duqm project in Oman to be carried out over 14 months

Switzerland-based Foster Wheeler has won the contract to design a new refinery planned at the port of Duqm in central Oman, according to sources close to the bidding process.

Project operator Duqm Refinery & Petrochemical Industries (DRPI) – a 50-50 joint venture of state-owned Oman Oil Company (OOC) and Abu Dhabi’s International Petroleum Investment Company (Ipic) – selected Foster Wheeler to carry out the scheme’s front-end engineering and design (feed) study.

Foster Wheeler was selected ahead of at least four other firms competing for the contract, which included US-based groups Bechtel, CB&I Lummus and KBR, and France’s Technip, which submitted bids in August 2013.

The feed contract is expected to be carried out over the next 14 months, according to sources, with DPRI likely to tender the project’s engineering, procurement and construction (EPC) packages in 2015.

DPRI is planning to invest $6bn on a new 230,000 barrel-a-day (b/d) refinery in Al-Wusta governorate on the sultanate’s central coast.

The lengthy process of tendering and awarding these early contracts is part of the reason for delays in the timeline of project, which is a cornerstone of Oman’s oil and gas strategy over the coming decade.

A senior manager at OOC said in late October that the project is now expected to be completed by the end of 2018, pushing the scheme back from a previous start-up target of 2017.

Some sources suggested delays could have been caused by the ongoing corruption investigations into contracting in Oman’s oil and gas sector. In February, the CEO of OOC, Ahmad al-Wahaibi, was sentenced to 23 years in prison for accepting a bribe related to a contract on a petrochemicals project.

The project also comes at a time when Ipic is in the process of tendering several major projects in the region, including the Fujairah refinery and the Fujairah liquefied natural gas (LNG) terminal in the UAE.

The refinery will be based on importing crude from outside of Oman and exporting refined products to the international market. DRPI is planning to build a petrochemicals complex for the second phase of the scheme, but this is still in the early study phase, according to sources.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications