Oman hydrocarbon projects growth in second half

09 August 2012

Sultanate’s contract awards expected to increase four-fold to $1.59bn

The Omani hydrocarbon projects market is forecast increase four-fold in the second half of 2012 after a quiet first six months of the year.

The sultanate’s oil and gas sector is one of the most mature industries in the region, with the national oil company Petroleum Development Oman (PDO) focusing on enhanced oil recovery (EOR) schemes to maintain output at depleting fields. The company will also build a series of depletion compression projects to enhance flow rates from its gas fields.

Operators in Oman are expected to award about $1.59bn in major engineering, procurement and construction (EPC) contracts in last six months 2012, compared with just $390m in the first half.

The first half included two packages on PDO’s Amin water injection development totalling $200m and a $150m contract on EOR facilities at the Al-Noor and Sakhiya fields.

The second half began with PDO awarding a $100m contract to Swiss firm ABB to build a gas condensate processing plant at Saih Nihayda. The deal covers the engineering, procurement and construction of a plant in the Ash-Sharqiyah region of north-east Oman with a capacity to process 4,500 cubic metres of condensate a day.

PDO is also expected to award more major gas processing projects in the coming months, including the second phase of the Saih Rawl depletion compression project and the Zauliyah gas plant. Both these EPC contracts are estimated to be worth in excess of $200m.

The largest contract expected to be awarded in the second half is Saltic FZCO’s Salalah ethylene dichloride (EDC) and caustic soda plant in Dhofar governorate in the south of Oman.

The estimated $500m project, which is the only major Omani chemicals scheme in the EPC bidding stage, is designed to produce 1,231 tonnes a day (t/d) of EDC and 1,000 t/d of caustic soda.

South Korean contractor Hanwha Engineering & Construction is the frontrunner to win the EPC contract, according to a company active on the project.

Two major oil block development contracts are also in the pipeline in the second half. Oman Oil Company Exploration & Production (OOCEP) is expected awarding packages totalling $500m by the end of the year on Block 60 at Abu Butabul.

The projects market in the second half of 2012 is also expected to beat the first and second halves of 2011, when $941m and $773m in contracts were awarded respectively.

By far the largest Omani hydrocarbons project on the horizon is Oman Refineries & Petrochemicals Company’s (Orpic) expansion of the refinery in Sohar, northern Oman.

The estimated $1.5bn scheme is set to eclipse the Omani projects market of the last few years when it is awarded in 2013, while the massive Duqm refinery project has also started gathering pace.

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