The Duqm Refining/Petrochemicals JV Is Tendering The FEED Job.

IPIC and OOC last week announced they were tendering the front-end engineering and design (FEED) contract for thir refinery and petrochemicals complex before end-March 2012. The long-awaited project has been at the study phase since mid-2010 and has been delayed by a number of issues including a lack of gas feedstock and financing.

However, the recent announcement of a planned gas pipeline from central Oman which will supply 12 MCM/d of natural gas to al-Duqm has solved the feedstock problem. One of the international contractors planning to bid for the job was on Jan. 10 quoted as saying: "every-one [in Oman] is confident that the FEED tender will be issued soon. The project is starting to feel real now and many people are talking about it as a viable job". When the FEED tender is released, then pre-qualification for engineering, procurement and construction (EPC) contracts for the complex could begin before end-2012.

The EPC contracts might be awarded by mid-2013 which means commissioning could begin at the new complex before the end of 2016. The scope of the project has not been disclosed by the JV partners and, therefore, it is difficult to estimate an exact budget, although it is expected to cost several billion dollars.

The contractor was quoted as adding: "If petrochemicals are to be produced, then it will be a complex [oil] refinery which will require a cracker [to produce ethylene]. You are looking at $5-10bn depending on the capacity of the different packages".

Earlier studies have cited a 400,000 b/d refinery plus additional petrochemical capabilities as feasible. But neither OOC nor IPIC has confirmed how much capacity they have planned for their venture (see down6OmanRefPetchFeb6-12).