Oman receives bids for $3.6bn plastics complex

12 August 2015

State-owned operator says the response from contractors has been positive

  • Five technical bids have been submitted for the polymers plant
  • Three technical bids have been submitted for the natural gas liquids extraction package
  • Bids are expected on the steam cracker and pipeline packages by mid-August

Oman Oil Refineries and Petroleum Industries Company (Orpic) has announced that eight bids have been submitted across two packages tendered as part of its $3.6bn Liwa Plastics Complex.

The project includes a polymers plant in Sohar’s industrial area, an natural gas liquids (NGL) extraction plant in Fahud, a steam cracker plant, and a 300-KM pipeline from Fahud to Sohar.

Five technical bids have been submitted for the polimers plant and three technical bids have been submitted for the NGL extraction package, according to a statement released on 10 August.

Bids are expected on the steam cracker and pipeline packages by mid-August.

“It’s positive to see so many strong technical bids submitted from several notable proponents and JV partners.  This project will be one of the largest in the region, and we expect to be making a significant impact on the local economy through EPC works alone,” said Mr Musab Al Mahruqi, CEO of Orpic.

According to the Orpic statement the company is on track to conclude evaluation of bids for all the packages early October 2015, with the Final Investment decision to be decided by the end of October 2015. 

“Once bids are submitted for the remaining two packages, they will be evaluated in October 2015 and awarded soon after,” it said.

Orpic is aiming to raise $4bn for this project, and targeting to sign financing agreements, concurrently with the award of the engineering, procurement and construction (EPC) contracts.

“We are currently in discussion with eight export credit agency’s regarding project due diligence, and the terms and conditions of financing this project, and we plan to launch requests for proposals to commercial banks over the coming month,” Al Mahruqi said.

The project has already obtained environmental permits from the Ministry of Environment and Climate Affairs.

It has also been granted gas allocation, and is finalising gas supply agreements, with the Ministry of Gas.

Land agreements with Sohar industrial Port Company and Sohar Free Zone are scheduled for signing this month, according to the Orpic statement.

The land agreement for Fahud is also scheduled for signing with the Ministry of Housing.

All technical and commercial terms and conditions for supply of utilities, such as electricity and cooling water, have been finalised with the Muscat-based companies Majees and Majan.

Orpic invited companies to submit bids for the construction of its proposed $3.6bn Liwa Plastics petrochemicals complex in May.

At the time it said that 19 (EPC) contractors had prequalified and were preparing to bid on the project’s four separate packages.

The cracker will use a combination of feedstocks including natural gas liquids (NGL) extracted from natural gas, liquid petroleum gas (LPG) from the Sohar refinery and aromatics plant, dry gas from the Sohar refinery and 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.

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