MUSCAT: Duqm Refinery, a 50:50 joint venture between the Sultanate’s state-owned Oman Oil Company and Kuwait Petroleum International, is seeking 65 per cent of its $7 billion capital expenditure for building the refinery from international and local lending institutions, a top-level official of the Kuwaiti firm told journalists. He was talking to journalists after signing a joint venture agreement for building the 230,000 barrels per day capacity refinery here on Monday.
Bakheet Shabib Al Rashidi, chief executive officer of Kuwait Petroleum Ltd, said that the joint venture has already started initial discussions with financial institutions for securing the required finance. Duqm Refinery is aiming to get $5 billion as loan of the total cost of the project at $7 billion. And the company is aiming at reaching a financial closure for the project by the year-end, added Hilal Al Kharusi, executive managing director of Oman Oil Company.
Duqm refinery is now evaluating financial bids from potential engineering, procurement and construction (EPC) contractors and a report will be submitted to Oman Oil Company for selecting the successful bidder. An EPC contractor for the main processing plant will be selected in May this year.
A tender for selecting an EPC contractor for the main project was floated way back in 2015. Also, the land leveling workfor the project, which stretches more than 900 hectares, was completed in May 2016.
There are three main packages for the refinery project – the main processing facility, utilities and a package for building facilities outside the refinery. The third package work includes storage facilities for fuel, an 80 km-long pipeline between the refinery and a major crude storage facility at Ras Markaz.
Further, there will be a 221km pipeline to transport natural gas to Duqm, which will be built by Oman Gas Company. The gas pipeline is needed for supplying feedstock for several proposed industries and utilities like a 3 megawatt power project and a water desalination plant with a capacity to produce 1,500 cubic metres of water per day. As much as 65 per cent of crude feedstock for the refinery will be from Kuwait, while the remaining 35 per cent will be supplied by the Sultanate.
