Budget squeeze drives search for funding
Omans Special Economic Zone Authority for Duqm (Sezad) is exploring all options to finance its planned $1bn liquid bulk terminal project.
It has asked bidders to prepare contractor finance packages with export credit agencies and local and international commercial banks. Banking groups have already agreed to support bidding contractors.
Sezad is also discussing financing the project with development lenders.
Due to the Omani governments budget constraints, Sezad is expected to select the financing option that ensures it the lowest upfront capital costs, combined with the lowest financing costs it can secure.
It is expected to offer a sovereign guarantee for the loan.
The liquid bulk terminal will handle the import and export requirements of the proposed new refinery at Duqm as well as other future oil and petrochemicals industries at the port. It will have a storage capacity of 760,000 cubic metres.
MEED reported in June that at least 10 contractors had submitted bids for package 1, which covers design, dredging and infrastructure work.
Prequalification is ongoing for package 2, which covers tanks, pipelines, loading arms and associated facilities.
The terminal project is due for completion before the 230,000 barrel-a-day Duqm refinery is finished, in 2020 at the earliest.
Duqm Refinery & Petrochemical Industries Company (DRPIC) a 50:50 joint venture of Abu Dhabi-based International Petroleum Investment Company and state-run Oman Oil Company is looking for a new equity investor, as well as a major financing package.
Chinese and Kuwaiti investors are thought to have shown interest in the $6bn project.
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