Kuwait Petroleum International (KPI) has replaced the UAE’s International Petroleum Investment Company (Ipic) for the development of Oman’s planned Duqm petrochemicals complex.

KPI, the international subsidiary of Kuwait Petroleum Corporation, has signed a memorandum of understanding with Oman Oil Company (OOC), which is behind the development of the 230,000 barrel-a-day refinery complex.

The two firms plan to own, manage and operate a refinery within the proposed complex. A joint venture company will be formed, with KPI and OOC as equal partners to facilitate the development of the complex.

A 9 million-square-metre site has been allocated for the project and levelling work has been completed as per schedule, with the final investment decision expected to be taken by the second quarter of 2017.

OOC and KPI are looking for additional partners to develop the complex, a flagship project for the Duqm freezone and port in the Al-Wusta region, which the Omani government has been keen to develop as an economic hub.

“OOC is keen on partnering with strategic companies to help develop promising projects, and continues to play a significant role in developing and diversifying the regional and national economy,” says Isam al-Zadjali, CEO of OOC.

Ipic, which was studying financing options to develop a $6bn refinery, in which it was an equal partner with the Omani government, pulled out of the project in 2016, citing that the new direction of the project, which includes petrochemicals, did not fit in with its investment strategy.

The agreement between Oman and Kuwait could be a “catalyst” for similar cooperation between GCC countries to develop megaprojects, says Al-Zadjali.

“We all hope this project will be the catalyst and ignition towards the start of similar projects in the energy field between GCC countries, where this megaproject will ultimately lead towards transforming the Duqm area into one of the most important hubs for energy-related industries regionally as well as internationally, eventually leading to a move from classical competition between GCC countries towards integrating and complementing each other,” he said.