Oman state-owned company spending another $100m on building fuel storage terminal
Oman Oil Refineries and Petroleum Industries Company (Orpic) is investing $220m to construct a 290-kilometre-long pipeline between Muscat and Sohar. The company has allocated another $100m to build the Al-Jifnain fuel storage terminal, according to its general manager.
The project is fully a commercial one and its returns depend only on the revenues generated from the use of the logistics assets of Orpic customers, with no financial aid from the government, the local Times of Oman quoted Orpics general manager Andres Suarez as saying. Ahli Bank and Bahrain-based Ahli United Bank have provided the financing for the project, he added.
The Muscat Sohar product pipeline is aimed at developing an integrated refining and petrochemicals business in Oman. Presently, vessels are transporting oil products between the Sohar and Mina al-Fahal refineries. With the pipeline in place, transportation will no longer be required, enabling Orpic to save $20m every year.
The pipeline and the Al-Jifnain terminal scheme will enable a connection between the Mina al-Fahal refinery in Muscat and the Sohar Refinery with a new storage and distribution terminal located in Jifnain via a bi-directional pipeline network.
In May, Orpic secured a RO350m ($909m) loan in a move the firm said will help finance future growth. The facility was arranged by Bank Muscat, together with a consortium including the local Bank Dhofar, National Bank of Oman, Bank Sohar, Ahli Bank Oman, Oman Arab Bank and the local branch of Doha-based Qatar National Bank.
Orpics other schemes include the Sohar refinery expansion and the upcoming Liwa plastics project.
It issued a tender for four packages on the $3.6bn Liwa scheme earlier this month. The complex will have the capacity to produce 1.4 billion tonnes a year (t/y) of petrochemicals products.
The upgrade of the Sohar refinery is set for completion in 2016. The $2.1bn expansion will increase capacity by 60 per cent to 187,000 barrels a day (b/d) from 116,000 b/d. The main contractors are a joint venture of the UKs Petrofac and South Koreas Daelim.
Orpic signed a $2.8bn financing deal to support the scheme in May 2014.
Orpic is one of several state-owned firms considering listing on the Muscat Securities Market, to reduce government spending, according to local press reports.
It produced 20 million barrels of refined products in the first quarter of 2015, 1 per cent less than in the same quarter in 2014. Orpic does not release regular financial results. Its revenues are thought to be more than $10bn a year.
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