Orpic to invest over $6.5 billion

Orpic to invest over $6.5 billion

Orpic’s three mega projects are expected to maximize the crude oil value

Oman Oil Refineries and Petroleum Industries Company (Orpic), Oman’s national refining and petrochemicals company, provides 100 percent of the nation’s fuel. Its refineries at Sohar and Muscat, as well as the aromatics and polypropylene production plants in the Sohar Port area, provide fuels, chemicals and feedstock to Oman and to international markets.

“One of Orpic’s key objectives is to incrementally enhance the value extracted from Oman’s crude oil. The exciting developments that Orpic will embark on over the next three years will go even further in capturing yet more of that value, to the benefit of the nation and its people. Orpic is investing more than $6.5 billion to maximize the crude oil value,” Musab Al Mahruqi, CEO, Orpic informed at the Ministry of Oil & Gas annual briefing this year.

SOHAR REFINERY IMPROVEMENT PROJECT (SRIP)

The Sohar Refinery Improvement Project (SRIP) is a $2.7 billion dollar capital investment for Orpic. The engineering, procurement and construction contract of SRIP was awarded in November, 2013 to a joint venture consisting of Daelim Industrial and Petrofac International on lump sum turkey basis. The project has recently gathered further momentum after award of all construction subcontracts and mobilization of two major subcontractors, Bahwan Engineering and Petron Gulf.

The project is a response to the need to upgrade refining capability in order to further maximize the value of Omani crude oil. At the same time, it will significantly improve environmental performance on the back of the recent progress made Orpic’s Environmental Improvement Programme (EIP). After completion of SRIP, the constraints in the existing Sohar Refinery will be overcome and additional quantity of much needed high value middle distillates will be produced.

The Project Completion Schedule for SRIP is 36 months. The physical progress as of January 2015 achieved on the Project EPC activities was 36.6 per cent against schedule of 32.2 per cent. As of January 2015, the total manpower at site was around 3,500 including 20 per cent Omanis in different disciplines, according to a company report.

MUSCAT SOHAR PRODUCT PIPELINE PROJECT (MSPP)

The $320 million-Muscat Sohar Product Pipeline (MSPP) project encompasses a two-way multi-product pipeline, the first of its kind to be constructed in Oman, and the new pipeline network will eliminate the need for Orpic to ship and truck refined products. Not only will it bring a new level of efficiency and lower costs to its business, it will reduce the number of fuel-tank truck journeys in and around Muscat. Heavy fuel-tank truck traffic in Muscat is expected to drop by 70 per cent.

The pipeline project will connect Orpic’s Mina Al Fahal and Sohar refineries by means of a 280-km pipeline to an intermediate distribution and storage facility at Jifnain in the Wilayat of Seeb, as well as a new storage facility at Muscat International Airport, which will receive aviation fuel directly from the pipeline. The project is due to be commissioned in the second quarter of 2017.

The pipeline is split into three sections — MAF-Seeb Terminal: 42-km (10 inches); Seeb Terminal-Airport: 27-km (10 inches); and Sohar-Seeb Terminal: 228-km (18 inches). The project will constitute of a state of the art control systems with latest technology of SCADA, leak detection, and telecommunication network and it will be equipped with loading facilities for trucks filling that is designed to load 200 trucks per day.

LIWA PLASTICS INDUSTRIES COMPLEX (LPIC)

The $3.6 billion Liwa Plastics Industries Complex is a transformational project that will improve Orpic’s product mix and business model, double its profits and support the development of a downstream plastics industry in the Sultanate of Oman. Taking advantage of the growing global market for plastics, this project is expected to create new business opportunities and increase employment in Oman, and it will firmly reinforce Orpic as a significant player in the international petrochemicals marketplace, in addition to providing new opportunities to develop businesses in the country. The project will be added to Orpic’s Complex in the Industrial Zone in Sohar and it is expected that construction works will commence in 2016.

According to a company report, LPIC is a steam cracker project that will utilize light ends produced in Sohar Refinery and the Aromatics Plant and the Natural Gas Liquids (NGLs) Extraction Unit that will be constructed as a part of the project in Fahud. The project will optimize the extracted NGLs. The project’s concept lies in rerouting elements of existing production in combination with additional purchased feedstock to deliver high value polymer products for the local and international marketplaces. Its primary goal is to further increase the value-add that can be extracted from the Omani crude oil and natural gas.

The project has six core components namely, a natural gas extraction plant in Fahud, a 300 km pipeline between Fahud and Sohar Industrial Port area for gas transportation, an 800 plus kTA Steam Cracker Unit, an HDPE Plant, an LLDPE Plant and a Polypropylene Plant. Those components will enable Oman, for the first time, to produce polyethylene, which is a form of plastic that enjoys the highest global demand; thus enabling Orpic to deepen access in its existing international markets as well as develop new ones.

The project is expected for completion during 2018, and the anticipated production volumes for the project are 880 KTA of Polyethylene (LLDPE/HDPE), 300 KTA of Polypropylene, 111 KTA of Pyrolysis Gasoline, 41 KTA of Butene and 90 KTA of MTBE (Methyl tert-butyl ether). After LPIC, plastics production would increase by 1 million tons, giving Orpic a total of 1.4 million tons of polyethylene and polypropylene production by 2018. With the addition of LPIC to Orpic’s highly integrated complex in Sohar, the operations will be the best-integrated refinery and petrochemical facility combinations in the world, and will be able to achieve the maximum value – add for Oman’s hydrocarbon molecule, as per the report.


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