Oman is close to awarding construction contracts and reaching financial close for its planned Liwa Plastics petrochemicals complex and Salalah LPG plant, sources close to the projects said Monday.
Approximately $5.2 billion of funding is set to be in place for state-owned Oil Refineries and Petroleum Industries Co's (Orpic) Liwa Plastics project by the end of the year, the sources said.
Contracts worth $2.8 billion were awarded in late November to Netherlands-based CB and I and Taiwan's CTCI for the construction of an 880,000 mt/y ethylene cracker and methyl tert-butyl ether plants.
Further contracts are expected to be signed -- Italy's Tecnimont will build three plastics plants, South Korea's GS Engineering and Construction and Japan's Mitsui will build a natural gas liquids plant at Fahud, and India's Punj Lloyd will build a new pipeline connecting the gas plant to Sohar.
Implementation of the Liwa project in the northern Omani city of Sohar will drive the development of a new LPG plant in the south of the country, the sources said.
The Fahud gas plant will supply ethane to Sohar and also LPG to Salalah where it will be processed for export by state-owned Oman Gas Co.
The LPG plant will have the capacity to produce 153,000 mt/y of propane, 115,000 mt/y of butane and 59,000 mt/y of condensate.
Development of the plant and export terminal is expected to cost between $700 million to $1 billion.
CB and I and UK-based Petrofac are competing for the construction contract for the plant. Bids were submitted in late October, and sources expect an award to follow the Liwa Plastics contract signing. Both complexes could be up and running in 2019.
At the same time, Oman is slowing moving ahead with the development of a 230,000 b/d refinery at Duqm in Oman's Wusta Governorate. Approximately half way between Muscat and Salalah, the $15 billion project is of strategic importance to the Sultanate.
It is being jointly developed by state-owned Oman Oil Company and Abu Dhabi's International Petroleum Investment Company (IPIC).
Contracts for construction of the complex will be awarded towards the end of 2016, according to Yaqoob al-Habsi, the head of project interfaces, the Oman Daily Observer reported Monday.
Speaking at a conference at the Duqm Port, Al-Habsi said seven consortiums had been prequalified to bid for the two engineering and construction packages.
Site preparation work is currently being carried out and is due to be completed by the third quarter of 2016, he said. Oman Tank Terminal Company (OTTCO) is building a 25 million barrel crude storage tank farm at Ras Markaz, 80 km south of Duqm. The refinery's first production is slated for Q3, 2020, Al-Habsi said.
The proposed refinery would be the largest in Oman, a country that pumps close to 1 million b/d of crude but currently has only 222,000 b/d of total refining capacity.
