MUSCAT: State-owned Oman Oil Refineries and Petroleum Industries Company (Orpic) is investing $320 million for building a 290 kilometre-long pipeline between Muscat and Sohar for transporting refined products, which is expected to start operations by mid-2017.
The Muscat Sohar Product Pipeline (MSPP) and the Al Jifnain Terminal project, which are part of the whole scheme, will enable a connection between Orpic’s Mina Al Fahal (MAF) Refinery in Muscat and the Sohar Refinery with a new storage and distribution terminal located in Jifnain via a bi-directional pipeline network.
Of the total capital expenditure, the Al Jifnain Terminal will have an investment ofaround $100 million and the pipelines and associated investment in both Sohar and Mina Al Fahal Refineries is estimated to be $220 million, Andres Suarez, general manager of Orpic Logistics LLC, recently told the Times of Oman.
“The project is fully a commercial one and its returns depend only on the revenues generated from the use of the logistics assets of Orpic customers, with no financial aid from the government. Additionally, the project has been financed by the Ahli Bank and Ahli United Bank,” added Suarez.
The Muscat Sohar Product Pipeline is a strategic project of Orpic, aimed at fulfilling its vision of building an Omani integrated refining and petrochemical business. The pipeline network is split into three sections— 45 kilometres between the Mina Al Fahaland Jifnain Terminal, 25 kilometres between the Jifnain Terminal and Muscat International Airport, and 220 kilometres between the Sohar and Jifnain Terminal.
He said the new logistics system has been designed with the objective of optimising the overall cost of transport and distribution of oil products in Oman, including vessels, tankers and power used in the pipelines, irrespective of who bears these costs.
Suarez explained that presently, many vessel movements arranged by Orpic are transporting oil products between the Sohar and Mina Al Fahal Refineries and through the new pipeline network; transportation will no longer be required. In addition to substituting vessel transportation with pipeline transportation, which is safer and efficient, the elimination of the vessel movements will save $20 million per year for the oil logistics system in Oman.
Besides, the pipeline will support the expansion of Muscat International Airport as well. It will directly connect the Al Jifnain Terminal with the new storage depot that is being built at the Muscat Airport as part of its expansion plan. “For this purpose, an agreement has been signed between Orpic Logistics and the Oman Airports Management Company (OAMC) for the installation of the pipeline and the receiving station inside the airport,” he added.
