Duqm refinery operator awards engineering contracts worth over $3.5bn

18 February 2018
Number of international contractors win engineering, procurement and construction deals for mega refinery project in Oman

The Duqm Refinery and Petrochemical Industries Co. (DRPIC) has awarded three engineering, procurement and construction (EPC) packages for the development of the Duqm refinery on Oman’s Al-Wusta coast.

A number of international engineering contractors have won deals amounting to over $3.5bn from DRPIC, a 50:50 joint venture between Oman Oil Company (OOC) and Kuwait Petroleum International (KPI), for the $7bn worth project, which is meant to have a capacity to process 230,000 barrels a day of crude oil.

EPC Package 1 was assigned to a joint venture of Tecnidas Reunidas (Spain) and Daewoo Engineering & Construction (South Korea) for the construction of process units. A joint venture between Petrofac (UK) and Samsung Engineering (South Korea) won the second package, covering utilities and offsites, while the third parcel went to a joint venture between Saipem (Italy) and CB&I (The Netherlands).

The project will take 47 months to complete in an area of 8 square kilometres. A harbour, dry dock, roads and utilities are already under construction.

Tecnicas Reunidas will take the lead on Package 1, holding a 65 per cent share of the work, which calls for execution of all the process units under a lump-sum turnkey (LSTK) contract worth $2.75bn.

Petrofac and Samsung will cover engineering, procurement, construction, commissioning, training and start-up operations for all the utilities and offsites under Package 2.

Saipem and CB&I will provide engineering, procurement, construction and commissioning under the $750m third package, which covers offsite facilities including a product export terminal, a crude tank farm and an 80 kilometre-long crude oil pipeline.

Gas will be provided by the Saih Nihayda gas plant in central Oman and transported via a new gas supply station at Duqm through a 221-km pipeline.

Initial work on the Duqm refinery project is scheduled to begin in Q3 2018.

Hilal Al Kharusi, deputy chairman of DRPIC has said that financing had reached an advanced stage and that the company intended to soon issue notices to the contractors to proceed with the works.

The signing ceremony follows the appointment by DRPIC in August 2017 of the UK’s Wood Group as the project management contractor (PMC).

International law firm Ashurst has meanwhile announced advising KPI, a subsidiary of the state-owned Kuwait Petroleum Corporation, on its joint venture with OOC to develop the Duqm refinery and petrochemical complex within the Special Economic Zone in northeastern Oman.

KPI completed its purchase of a 50 per cent interest in the Duqm Refinery and Petrochemical Industries Company this month.

The refinery will process Kuwaiti crude oil providing an important strategic outlet to Kuwaiti's crude oil.

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