ITB nears on Sohar

15 October 2001

Oman Refinery Company (ORC)is preparing to issue the invitation to bid (ITB) in November for the estimated $870 million contract to build the Sohar refinery, project sources say. Eleven groups have applied to prequalify for the main engineering, procurement and construction (EPC) package. The client is expected to draw up a shortlist of about six groups.

The companies that applied for prequalification are: JGC Corporationand Chiyoda Corporation, both of Japan, Pan Arabian for Pipelines of Jordan, with a Bulgarian partner; Mitsui Engineering & Shipbuilding Companyof Japan, with Washington Group Internationalof the US and Shinwa Engineeringof South Korea; Hyundai Engineering & Construction Companyof South Korea, with Snamprogetti of Italy; the local Al-Hassan Engineering; LG Engineeringof South Korea, with the US-based Foster Wheeler Corporation; Technip of France, with South Korea's Samsung Corporation; the local Galfar Engineering & Contracting, with Lurgi Bamagof Germany and Sunkyong Engineering & Construction Company of South Korea; and Shin Win Petroleum, with Sinopec, both of China (MEED 15.9.00). The US-based ABB Lummus Globalis the project management consultant.

The scope of the EPC contract includes construction of a 75,000-barrel-a-day (b/d) residual fluidised catalytic cracker, process and utility units and offsite facilities, installation of operations infrastructure and marine development works.

JGC has completed the front-end engineering and design (FEED) studies for the refinery, which is planned to produce propylene, liquefied petroleum gas (LPG), unleaded gasoline, low-sulphur oil, fuel oil and sulphur. Technology at the plant will be licensed by the US' UOP. The UK's BPwas nominated in September as preferred bidder for the offtake agreement. A contract is expected to be signed this month (MEED 21.9.01).

ORC is also planning to build a 340,000-tonne-a-year polypropylene unit next to the refinery. The plant, which is expected to cost an additional $150 million, will utilise feedstock supplies from the main refinery and take two years to complete. Two prospective partners for the initiative were shortlisted in January for the scheme: Copenhagen-based Borealis, and a team of ABB Lummus, with South Korea's LG Group. A final selection is expected before the end of the year (MEED 26.1.01).

The refinery is one of several industrial projects planned for the Sohar industrial area and is likely to attract the attention of a host of regional and international lenders. Bank of Americais acting as financial adviser to the clients, ORC and Oman Oil Company (MEED 20.7.01, Cover Story).

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