Oman downstream group to finance 70 per cent of $5.5bn project through debt
- Commercial bids due to be submitted in September
- Financing to be concluded with construction contract awards
- Liwa plastics complex is the sultanates largesst ever petrochemicals project
Oman Oil Refineries and Petroleum Industries Company (Orpic) expects to receive commercial bids for the four packages of its $5.2bn Sohar petrochemicals complex in September, according to the groups CEO. The state-owned firm will award the main contracts in the fourth quarter of this year.
Orpic received technical engineering, procurement and construction (EPC) bids for the packages of the Liwa plastics complex in August.
The packages include a steam cracker, polymers plants, a natural gas liquids (NGLs) extraction facility in Fahud and a 300-kilometre pipeline connecting Fahud to Sohar.
We are due to receive financial bids starting from next week until the end of the month. By the end of September, we will have received all the financial bids for the Liwa plastics project, Orpic CEO Musab al-Mahruqi said during a tour of the companys Sohar site on 8 September.
We plan to award in the fourth quarter so either in October or November, depending on evaluation and how good the bids are in general.
Orpic will borrow money to finance 70 per cent of the project and has contacted 35 banks and eight credit export agencies about funding, according to its chief financial officer Nazar al- Lawati.
Japans Mitsui Banking Corporation is advising Orpic on raising the funds, which are expected to be settled with the EPC awards.
We are not waiting for the commercial EPC bids to come in to start financing. We started the process in January, said Al-Mahruqi. Securing of financing will be concurrent with the award of the EPC bids in the fourth quarter.
Orpic says the process will be the largest project financing in Oman.
The project has already obtained environmental permits from the sultanates Environment & Climate Affairs Ministry. It has also been granted a gas allocation, and is finalising gas supply agreements with the Oil & Gas Ministry.
The cracker will use a combination of feedstocks, including NGLs extracted from natural gas, liquid petroleum gas (LPG) from the Sohar refinery and aromatics plant, dry gas from the Sohar refinery, as well as condensates from Oman LNG.
The complex will have the capacity to produce 880,000 tonnes a year (t/y) of high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE); 300,000 t/y of polypropylene (PP); 90,000 t/y of methyl tert-butyl ether (MTBE); 41,000 t/y of butane; and 111,000 t/y of pyrolysis gasoline.
The Liwa complex is expected to be commissioned in 2018.