Japanese win Sohar refinery EPC contract

10 January 2003
The Tender Board announced on 7 January that the Japanese team of JGC Corporationwith Chiyoda Corporationhas been awarded the $879 million engineering, procurement and construction (EPC) contract for the 125,000-barrel-a-day (b/d) Sohar refinery. The JGC/Chiyoda group will sign the contract once financial close has been achieved on the estimated $1,000 million project. The client is the Sohar Refinery Company (SRC), a wholly-owned subsidiary of the Oman Refinery Company(MEED 25:10:02).

The Japanese team was the clear low bidder for the contract when commercial bids were opened from four international groups in mid-September. It was subsequently nominated as the preferred bidder in October. US-based ABB Lummus Globalis the project manager.

The project will be financed by a 70:30 debt/equity package, with the debt being covered by an estimated $700 million loan. The preliminary information memorandum (PIM) for the loan is due to be sent out to banks before the end of March, with financial close slated for mid 2003. SRC's financial adviser is Bank of America.

The refinery will include: a 75,260-b/d residue fluid catalytic cracker, licensed by UOPof the US; an alkylation unit; liquefied petroleum gas, light gasoline and heavy gasoline sweetening units; a sour water stripping unit, and a sulphur recovery and propylene recovery unit.

The refinery's crude feedstock will come from Mina al-Fahal via a proposed 200-kilometre mixed feedstock pipeline. Conceptual studies for the link have been completed covering route variations, pump station options, optimal pipeline diameters and operation and investment costs. A tender for the EPC package is expected in the second half of 2003. Oman Oil Company- which operates the sultanate's oil pipeline network - or SRC will own and operate the pipeline (MEED 11:10:02).

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