Shareholder agreements are being finalised on the Duqm refinery project between state energy investment arm Oman Oil Company (OOC) and Kuwait Petroleum International (KPI).

Financial closure on the greenfield refinery is expected to be achieved in the middle of the year, reported local newspaper Muscat Daily.

“We are finalising the shareholder agreements with KPI and envision financial closure sometime in the middle of this year. We are hoping to start construction activities before year-end or early next year,” said OOC chief executive Isam al-Zadjali.

Financial structure of the project will be 60:40 in terms of equity and project financing, involving banks and credit agencies, he added.

The partnership is expected to be a 50:50 joint venture between the two firms and project work is progressing as per the original plans.

“We have no plans, whatsoever, to delay the project. The Kuwaiti partner has already agreed on this,” says al-Zadjali.

MEED reported that KPI, state-owned Kuwait Petroleum Corporation’s international subsidiary, replaced Abu Dhabi’s International Petroleum Investment Company (Ipic) as partner on the project. Ipic pulled out of the project citing its direction, with the company concluding that petrochemicals element of the scheme did not fit in with its investment strategy.

MEED reported recently that the refinery had opened technical and commercial bids from four engineering companies vying for project management consultancy contract.

Commercial engineering, procurement and construction (EPC) bids on the project will be submitted by 20 February.