Oman to sign refinery contracts in early 2018

24 October 2017
EPC contracts for Duqm Refinery to be signed by early 2018

Contracts for the three engineering, procurement and construction [EPC] packages on the Duqm Refinery - Oman's largest single-phase project - are likely to be signed later this year or early next year, according to a senior Omani official.

"[By the] end of the year or early next year, they will sign the engineering, procurement and construction contracts," Said al-Mahrouqi, planning and optimisation manager at Orpic told the 8th Argus Middle East Oil Products Conference in Dubai.

The $6bn refinery is being developed by a joint venture of Oman Oil Company and Kuwait Petroleum International. Contractors for the three main EPC packages were selected in August.

MEED reported earlier this month that the 230,000 barrel-a-day refinery,  modelled on the partly Kuwaiti-owned $9bn Nghi Son refinery in Vietnam will miss its November target for financial closure, which is likely to be delayed by six to seven months.

Package one to develop oil processing facilities at the refinery was awarded to South Korea’s Daewoo and Spain’s Tecnicas Reunidas. Package two went to the UK’s Petrofac and South Korea’s Samsung Engineering, while the third package for construction of storage tanks in Ras Markaz, as well as a product export terminal, was awarded to Italy’s Saipem. The deals are worth a collective $5bn.

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

"It's mainly a middle distillate refinery - so it's mainly diesel and jet fuel. There will be some naphtha, liquefied petroleum gas and off gas and that will be saved for the phase two, which will have a steam cracker to produce to some polymers, gasoline and some petrochemicals," said Al-Mahrouqi. "Phase three will [involve] further downstream petrochemicals, but there are no plans as of today."

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