Operator secures Duqm Refinery financing

06 November 2018
The Oman/Kuwait joint venture says financing was provided by 29 financial institutions from 13 countries

The Duqm Refinery and Petrochemical Industries Complex (DRPIC), the 50:50 joint venture of state-owned Oman Oil Company (OOC) and Kuwait Petroleum International (KPI), has announced securing $4.61bn worth of project finance facilities for its upcoming Duqm Refinery project along Oman’s Arabian Sea coast.

In a statement, DRPIC stated that the financing was provided by 29 financial institutions from 13 countries, while insurance, as well as guarantees, were provided by three major export credit agencies.

The finance facilities include an international commercial facility, an onshore commercial facility, an Islamic facility, and facilities covered by the UK’s Export Finance, Spain’s CESCE, South Korea’s K-EXIM and a K-EXIM direct facility.

“The $4.61bn, multi-sourced financing signed for the project is not only the largest project financing in the Sultanate of Oman. It also includes the largest Shariah-compliant facility to a greenfield project in Oman provided by a consortium of Islamic financing institutions,” Mubarak al-Naamany, DRPIC’s chief financial officer, has been quoted as saying.

DRPIC held a formal groundbreaking ceremony for the $7bn project on 26 April. Contractors working on the project were issued a notice to proceed (NTP) in June.

The project is expected to be completed and ready for startup 42 months from the issue of the NTP.

In February, DRPIC awarded three engineering, procurement and construction (EPC) packages worth more than $5bn.

The EPC work at Duqm Refinery is divided into three separate packages. The scope of EPC 1 includes the process units, while EPC 2 comprises the utilities and offsite facilities. EPC 3 includes the product export terminal at Duqm Port, Duqm Refinery’s dedicated crude storage tanks at Ras Markaz and the 80-kilometre interconnecting pipeline from these tanks to the refinery.

A joint venture (JV) of Spain’s Tecnidas Reunidas and South Korea’s Daewoo Engineering & Construction won package 1. A JV of UK-based Petrofac and South Korea’s Samsung Engineering won the second package, while the third parcel went to a JV of Italy’s Saipem and US-based CB&I.

Duqm Refinery, with a capacity to process 230,000 barrels a day, is being designed to be able to process a range of blended crude oils and has been configured as a full-conversion hydrocracker and coking facility.

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