Oman awards main packages for Duqm Refinery

05 August 2017

The refinery will have a production capacity of 230,000 barrels a day

Oman’s Duqm Refinery has awarded the three main engineering, procurement and construction contracts for its planned 230,000 barrels-a-day (b/d) refinery, which will be the largest single phase project undertaken in the sultanate.

Confirming earlier MEED reports, the refinery client awarded package one, which involves developing oil processing facilities, to South Korea’s Daewoo and Spain’s Tecnicas Reunidas.

The second package,which covers facilities, utilities tankage and buildings, was awarded to UK’s Petrofac and South Korea’s Samsung Engineering. The contract is estimated to be worth more than $2bn.

The third package, which includes building eight storage tanks in Ras Markaz and a product export terminal and 80km interconnecting pipeline to Duqm, was awarded to Italy’s Saipem.

Duqm Refinery is part of Oman’s strategy to divsersify its energy sector through development of industrial hubs in port cities such as Duqm, Sohar and Salalah.

The refinery will be operated by a joint venture of Oman Oil Company and Kuwait Petroleum International (KPI), the overseas investment arm of state-run Kuwait Petroluem Corporation. KPI replaced Abu Dhabi-based International Petroleum Investment Company, which exited the scheme in 2016 citing a change in strategy.

MEED understands that the refinery project is looking to add a third development partner and has been in discussions with South Korean firms to sell a 20 per cent stake.

The Duqm Refinery scheme has yet to reach financial close, with the client now seeking to reach this next milestone in November.

The refinery will receive 70 per cent of its crude feedstock from Kuwait, and the remainder from local fields.

Once commissioned, it will produce diesel, jet fuel, naphtha, liquefied petroleum gas, sulphur and pet coke as its primary products, which will be traded from the adjacent Duqm port.

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