MUSCAT: Oman Oil Company (OOC), the Sultanate’s investment arm in the energy and energy-related sectors, and Kuwait Petroleum International (KPI), the international subsidiary of Kuwait Petroleum Corporation (KPC), on Wednesday signed a memorandum of understanding (MoU) to cooperate in the development of Duqm Refinery and Petrochemical Complex in Duqm (SEZD).
The strategic partnership is part of the efforts being made to seek further investment opportunities that open doors to develop major industrial projects in Duqm. Both firms are aiming to reach a long standing partnership to own, manage and operate a refinery and at a later phase, a petrochemical complex in Duqm. It is envisaged that both parties will own equal shares in a joint venture company for such purpose.
Meanwhile, partners are exploring additional participation from strategic third parties. This project is amongst the Sultanate’s most significant undertakings to date in the energy and petrochemical field, with the potential to serve as the springboard for Duqm’s planned transformation into one of the largest industrial and economic hubs in the region. A 900-hectare site has already been allocated for the project and the leveling has been completed as per schedule. The final investment decision is expected to be taken by the second quarter of 2017. “OOC is keen on partnering with strategic companies to help develop promising projects, and continues to play a significant role in developing and diversifying the regional and national economy,” said Eng. Isam Al Zedjali, chief executive officer of OOC.
“We look forward to a successful partnership with Kuwait Petroleum International to continue envisioning and developing joint investment projects, serving mutual interests. We also hope that this partnership will bring about new opportunities and prospects in the energy related sector.”
Nizar Al Adsani, deputy chairman and chief executive officer of Kuwait Petroleum Corporation (KPC) highlighted the importance of the MoU agreement, saying: “This potential opportunity exemplifies the spirit of economic cooperation between our two great nations and helps achieve two major milestones, namely satisfying KPC’s strategy of investing in strategic markets, in regions that strengthen and consolidate KPC’s current markets and building strong economic ties with a sister GCC country”.
“We all hope that this project will be the catalyst and ignition towards the start of similar projects in the energy field between GCC countries where this mega project will ultimately lead towards transforming the Duqm area into one of the most important hubs for energy related industries regionally as well as internationally, eventually leading to a move from classical competition between GCC countries towards integrating and complimenting each other,” he added.
The MoU was signed on behalf of OOC by Hilal bin Ali Al Kharousi, Acting Executive Managing Director of Duqm Holding and Bakheet Al Rashidi, CEO of Kuwait Petroleum International Ltd (KPI), at Crowne Plaza Hotel in the Special Economic Zone in Duqm (SEZD).
Bakheet Al Rashidi, CEO of Kuwait Petroleum International (KPI) stated: “In addition to the local Omani rich experience in the oil related industries, KPI’s ample international experience in mega refinery and petrochemical projects, which KPI will cross fertilize and bring about to the Duqm Project from its European and Asian operations, will further support and guarantee the success of the project and will create a pool of regionally trained work force for this project and future projects in the oil industry”. “This opportunity has attracted vast local and international attention due to its unique nature, as well as the benefits it will bring about to the region and two countries, in addition to paving the road for further cooperation between both countries,” added Al Rashidi.
Duqm Refinery project is located in the special economic zone in Duqm (SEZD), in Al Wusta region. This gives the project a strategic maritime location and a competitive advantage being in the path of international shipping lines in the Indian Ocean and the Arabian Sea, thus easing the process of transport in and out of the region. The refinery once completed will have the capacity to process 230,000 barrels of crude oil per day that will serve both local and international markets.
The Duqm Refinery and Petrochemical Industries Company was founded in 2012 as a joint venture between Oman Oil Company (OOC) and the International Petroleum Investment Company (IPIC). This partnership has resulted in the completion of substantial work, driven through the project’s Steering Committee and the Board of Directors. However, IPIC concluded this year that the proposed new direction of the project, which includes petrochemicals, does not fit its investment strategy and decided to pave the way for new partners to enter the project. Duqm Refinery will be one of the growth engines for the special economic zone. It will provide development opportunities for new projects that will directly and indirectly interface with the refinery.
